Middle District of Tennessee
Press releases recorded for this federal judicial district.
Vice Lord Leader Sentenced to 28 Years in PrisonRead the Press Release
Sterling Rivers a/k/a “Little Real”26, of Lebanon, Tennessee, was sentenced yesterday in U.S. District Court to 28 years in prison for conspiring to distribute large quantities of crack cocaine and cocaine, as part of his involvement in a criminal street gang called the Unknown Vice Lords, announced David Rivera, U. S. Attorney for the Middle District of Tennessee.
Rivers was indicted with 16 other individuals in September 2011 following a nearly two year investigation into a national street gang, the Vice Lords, operating in Wilson and Putnam County, Tennessee and beyond. Rivers fled following his indictment and was arrested in October 2011 as a fugitive in Texas. Rivers was convicted following a trial in September 2013 in which he represented himself.“This sentence reaffirms that drug trafficking and organized crime will result in significant prison sentences,” said U.S. Attorney David Rivera. “This and other recent sentences of gang members should send a clear and convincing message that violent gang activity in this district will be vigorously pursued by the U.S. Attorney’s Office and our law enforcement partners.”
The convictions in this case followed a two-week trial, during which Rivers represented himself. Proof at trial established that Rivers was engaged in organizing the Vice Lords Gang throughout the state of Tennessee and had been involved in an array of violent crime, including the robbery of another drug dealer and the shooting of another individual.
Sixteen other defendants were also charged in connection with this investigation and all have been convicted.
This investigation was conducted by the FBI, the Lebanon Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Tennessee Bureau of Investigation and the Tennessee Highway Patrol. This case was prosecuted by Assistant United States Attorneys Braden H. Boucek and Brent Hannafan.
Nashville Gang Member Sentenced for Shooting in Public HousingRead the Press Release
Gerald Edwin Farmer, aka HK, 24, of Nashville, Tenn., was sentenced today to 210 months (17 ½ years) in prison, announced David Rivera, U. S. Attorney for the Middle District of Tennessee.
Farmer, a Rollin’ 40s Crips street gang member, pleaded guilty in June 2013 to being a felon in possession of ammunition which he used to shoot another person in the densely populated James Cayce public housing development, in Nashville, in November 2011. At that time, Farmer was on state probation for several offenses including an incident in which he shot at two other people. U.S. District Judge Todd Campbell ordered the federal sentence to run consecutively to a four year state sentence for that previous shooting incident.
“This sentence represents another case where we are working with our law enforcement partners to remove career criminals from our neighborhoods for long periods of time,” said U.S. Attorney David Rivera. “Farmer’s actions displayed a complete disregard for innocent life when he chose to fire several rounds in a densely populated area, near houses which were likely occupied by children and other innocent victims. When an individual resorts to this type of violence, a swift and appropriate response from the law enforcement community can be expected.”
According to the facts presented at the guilty plea hearing, Farmer fired several shots at an individual in the housing development near South 7th Street and Shelby Avenue in Nashville. The victim was struck multiple times and subsequently hospitalized for several weeks. Farmer fled the area, but when later arrested, he admitted that he was at the scene of the shooting. Farmer falsely claimed that a specific juvenile had been with him and that the juvenile was actually the shooter.
The subsequent investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, in conjunction with the Metropolitan Nashville Police Department, established that the juvenile was not even at the scene and that Farmer was the actual shooter. The firearm that Farmer used to shoot the victim was not recovered, but he was successfully prosecuted for possession of the ammunition which was used in the shooting.
ATF Special Agent in Charge Jeff Fulton said, “This joint investigation between ATF and the Metro Nashville Police Department illustrates the impact on reducing violent crime when agencies combine and coordinate their skills and resources. ATF remains dedicated to identifying, targeting, and investigating violent criminals who prey upon our citizens and lessen the quality of life in our neighborhoods. This investigation is an example of excellent investigative work and a job well done by the investigators.”
Farmer’s previous convictions included aggravated burglary, conspiracy to commit aggravated robbery, aggravated assault, and drug distribution, which qualified him as an Armed Career Criminal under federal law. Judge Campbell rejected Farmer’s request for concurrent sentencing with his state offenses, finding that Farmer had a history of violent criminal conduct and that this offense “nearly resulted in death.”
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Metropolitan Nashville Police Department. Deputy Criminal Chief Harold McDonough and Assistant United States Attorney Sunny A.M. Koshy represented the United States.
Former Owners of Murfreesboro Ambulance Service Sentenced to Federal Prison for Defrauding MedicareRead the Press Release
Woody Medlock, Sr., 70, and his wife, Kathy Medlock, 58, of Murfreesboro, Tennessee, former owners of Murfreesboro Ambulance Service, were sentenced yesterday to federal prison for Medicare fraud and aggravated identity theft, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Woody Medlock received a 75 month prison sentence and Kathy Medlock was sentenced to 70 months in prison.
“Health care fraud continues to be a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera. “With the investigative resources of our law enforcement partners, we will continue to pursue those who steal from the taxpayers by defrauding the Medicare program and seek appropriate penalties against those involved.”
The sentence followed the Medlocks= conviction by a jury on May 31, 2013, on 39 counts including conspiracy, Medicare fraud, making false statements related to health care matters and wire fraud. Both defendants also were convicted of two counts of aggravated identity theft for using the names and Medicare numbers of patients without lawful authority in submitting claims. Kathy Medlock was also convicted of an additional count of aggravated identity theft for use of a doctor’s name in forging and submitting multiple medical necessity forms as part of a Medicare audit.
According to the evidence presented at trial, from approximately 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients to and from dialysis treatments that were not qualified to receive ambulance transportation. The Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims totaling more than $1.2 million and received at least $457,730.12 in fraudulent payments from Medicare for reimbursement of the ambulance transports.
Testimony at trial further showed that these fraudulent claims falsely represented that patients were on stretchers when the patients were actually transported in the front seat of the ambulance or in the captain’s chair/jump seat in the back of the ambulance and were not on stretchers. Other fraudulent claims reported that patients were transported individually, when in fact two patients had been transported simultaneously in one ambulance.
“For years, the Medlocks used their ambulances as taxpayer taxicabs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Today’s action sends a clear message: Medicare fraud can lead to federal prison.”
“Health care fraud harms the community at large, and threatens the strength and integrity of our health care system,” said A Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “These sentences should send a strong, clear message to anyone seeking to defraud the health care system: You will get caught, and you will be brought to justice.”
“The TBI will continue to aggressively combat healthcare fraud,” said Director Mark Gwyn of the Tennessee Bureau of Investigation. “This is another case that exemplifies how collaborative efforts result in tough penalties for those who commit fraud against the healthcare system.”
This case was investigated by the United States Department of Health and Human Services - Office of Inspector General, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. The United States was represented by Assistant United States Attorney Sandra G. Moses, Special Assistant United States Attorney James S. Seaman, and Assistant United States Attorney Christopher C. Sabis.
Former Head Teller Pleads Guilty to Bank EmbezzlementRead the Press Release
Volunteer State Bank Employee Admits Taking Over $264,000
Kaley Gregory, 29, of Gallatin, Tennessee, pleaded guilty on January 3, 2014, to one count of bank embezzlement, announced David Rivera, United States Attorney for the Middle District of Tennessee.
At the plea hearing, Gregory admitted that from 2009 until May 2013, while employed as the head teller of the Gallatin branch of Volunteer State Bank, she embezzled more than $264,000 from the bank and converted this cash to her own use. Gregory also admitted making false entries into the bank’s computer system in order to conceal her embezzlement and to manipulating bank audits to conceal the shortfall of cash resulting from her scheme. Gregory further acknowledged using a relative’s bank account to disguise the source of embezzled cash which she ultimately deposited into her own personal bank account and used for retail purchases, travel and paying bills.
After accepting Gregory’s plea, U.S. District Judge Todd J. Campbell scheduled a sentencing hearing for March 21, 2014. Gregory faces a maximum sentence of 30 years in prison and a maximum fine of up to $1,000,000. In addition, Gregory will forfeit the proceeds of her embezzlement and any property derived from these proceeds.
The case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Tennessee Man Pleads Guilty to Federal Hate Crime for Cross BurningRead the Press Release
Timothy Stafford, 41, pleaded guilty today in federal court in Nashville, Tenn., for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tenn., the Department of Justice announced.
Stafford pleaded guilty to conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights. Stafford admitted in court that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an interracial couple in Minor Hill, Tenn.. Stafford constructed a wooden cross in a workshop behind his house. Stafford and his co-conspirators then purchased diesel fuel and covered the cross in diesel fuel-soaked cloth. Stafford then drove his conspirators and the cross to the victims’ residence. Upon arriving at the residence, the other conspirators placed the cross in the driveway and ignited it. Stafford and the conspirators chose to burn the cross at the victims’ house, because of their race, as well as the race of their child. Stafford admitted to targeting the interracial couple because he did not want interracial dating in his community.
Ivan “Rusty” London IV, 21, of Lexington, Ky., previously pleaded guilty for his role in the conspiracy, and is currently awaiting sentencing.
“Hate motivated crimes will not be tolerated in our country,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”
“The right to live in a community of your choosing, free of acts of intimidation that are meant to inspire fear, is a fundamental right in the United States,” said David Rivera, U.S. Attorney for the Middle District of Tennessee. “The Department of Justice takes these transgressions very seriously and to the extent that individuals interfere with fundamental civil rights, they will be prosecuted to the full extent of the law.”
Timothy Stafford faces a statutory maximum of 10 years in prison. Ivan London faces a statutory maximum of 5 years in prison.
This case was investigated by the Columbia, Tenn., Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Jared Fishman of the Civil Rights Division.Former Robertson County, Tenn. Commissioner Sentenced to 71 Months in Prision for Ponzi SchemesRead the Press Release
More Than $16 Million Solicited From Investors
Edward Shannon Polen, 37, of Greenbrier, Tennessee and former Robertson County Commissioner, was sentenced yesterday to serve 71 months in prison, to be followed by a five year term of supervised release, for operating a series of Ponzi schemes that solicited more than $16,000,000 from investors, announced David Rivera, United States Attorney for the Middle District of Tennessee.
"Investors are devastated by cases like these, especially people who trust their life's savings to individuals they know and trust, only to find that their trust has been misplaced," said U.S. Attorney David Rivera. A"In this case, a lot of people invested money they couldn't afford to lose, particularly in hard economic times. The United States Attorney's Office will diligently and aggressively prosecute those who perpetrate such schemes and prey on unsuspecting and trusting investors."According to testimony at a guilty plea hearing conducted in December 2012, Polen admitted that, between January 2007 and about March 2011, he operated three investment Ponzi schemes in which he solicited and received approximately $16,000,000 from more than fifty investors. Polen admitted that the three investment schemes, identified individually as the "John Deere Investment," the "Greenway Investment," and the "Tennessee Valley Authority Coal Ash Cleanup Investment," were totally fraudulent and he never intended to invest any of the funds he received from investor-victims.
“Yesterday, justice was served for the victims of Polen’s Ponzi schemes, and as a consequence of his crimes, Polen will spend almost six years in federal prison,” said Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “Polen stole more than $15 million from investors and cheated them, TARP recipient F&M Bank, and other TARP banks in a fraudulent investment scheme where his sole objective was to obtain money to feed his gambling habit and to sustain his scam. The consequences of Polen’s fraudulent actions rippled throughout his community and impacted all U.S. taxpayers who are investors in TARP. SIGTARP, alongside our law enforcement partners, will bring justice to those who exploit and abuse the taxpayer-funded TARP bailout.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people's money," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Division. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable. We are pleased with the successful resolution of this investigation due to the cooperative efforts of our law enforcement partners."
"Those who participate in this type of criminal scheme steal the dreams of future and financial security from innocent victims," said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. "I am very proud of the hard work of the FBI and our law enforcement partners, and today's sentence demonstrates that those who intentionally commit fraud for personal benefit cannot hide from justice and will pay the price for their crimes."
In or around January 2007 he began soliciting funds for investment in the purchase and resale of tractors and other farm equipment that had been repossessed by John Deere & Company. It was part of the scheme that Polen falsely represented to investors that he needed funds to finance the initial purchase of repossessed John Deere farm equipment, which he would immediately resell to a "guaranteed buyer" for a significant profit. According to Polen, investors would thereafter receive a return of their principal investment, plus a substantial profit. However, the John Deere Investment did not exist, and defendant never invested any of the funds collected from victim- investors. Instead, defendant converted John Deere investor funds to his own personal use and to repay other investor-victims.
In or around January 2008, Polen began soliciting funds to finance the initial purchase of construction materials, which he told investors would be re- sold to the subcontractors of the State of Tennessee Greenway projects for a significant profit. As in the John Deere scheme, defendant promised victim-investors that they would receive a return of their principal investment, plus a substantial profit. However, like the John Deere scheme, the Greenway Investment did not exist, and defendant never invested any of the invested funds. Instead, defendant converted Greenway project investor funds to his own personal use and to repay other investor-victims.
In or around February 2009, Polen began soliciting investment funds to purchase construction materials and equipment, which he told investors would then be sold to contractors and sub-contractors hired by the Tennessee Emergency Management Agency ("TEMA") for use in the Kingston Fossil Plant clean-up project. As in the John Deere and Greenway investment schemes, Polen promised victim-investors that they would receive a return of their principal investment, plus a substantial profit. However, the TVA Coal Ash Investment did not exist, and Polen never invested any of the funds collected from victim-investors. Instead, Polen converted TVA Coal Ash investor funds to his own personal use and to repay other investor-victims.
It was a significant part of each of the three investment schemes that Polen would, at the time of investment, provide investors with a minimum of two post-dated checks, one for the principal amount of their investment and the other for the profit that their investment was expected to produce. The post-dated checks were drawn on multiple accounts controlled by Polen at various banks insured by the Federal Deposit Insurance Corporation. Polen used the post-dated checks as a ruse to create the illusion for investors that their investments were safe and secure. Polen assured the investors that the post-dated checks could be cashed at any time, but at the time he tendered the checks to the investors, Polen knew that the accounts upon which the checks were drawn had either been closed or did not, and would never contain funds sufficient to cover the amounts of the checks.
TARP Connection:
The parent companies of F&M Bank (F&M Financial Corporation of Clarkesville, Tenn.), U.S. Bank (U.S. Bancorp of Minneapolis, Minn.), and Fifth Third Bank (Fifth Third Bancorp of Cincinnati, Ohio) each received federal government assistance through the U.S. Department of the Treasury's Troubled Asset Relief Program (TARP). The federal government realized an approximate $3.8 million loss on its approximate $17.2 million taxpayer investment in F&M Bank. The TARP investments in U.S. Bank (approximately $6.6 billion) and Fifth Third Bank (approximately $3.4 billion) were repaid in full on June 17, 2009, and Feb. 2, 2011, respectively.
Polen wrote checks on accounts from these institutions; accounts which were either closed or lacked sufficient funds for the withdrawals.
This case was investigated by the TVA-OIG, IRS-CI, FBI, TBI, and SIG-TARP. The United States was represented by Assistant United States Attorney John K. Webb.
Woman Sentenced to 137 Months in Prison for Assault on A Federal Officer and for Failure to AppearRead the Press Release
Tequila Marsh, 41, of Nashville, Tenn., was sentenced today to serve 137 months in prison, to be followed by a three year term of supervised release, for assaulting a United States Postal Inspector and for failing to appear for a sentencing hearing, announced David Rivera, United States Attorney for the Middle District of Tennessee.
"Local, state, and federal law enforcement officers place themselves in harm's way every day to protect the rest of us," said U.S. Attorney David Rivera. "When individuals engage in criminal conduct and place our law enforcement officers and the public in danger of physical harm, it is a serious matter that warrants serious consequences. Those individuals should know that they will be held accountable for their crimes."
According to testimony at a guilty plea hearing conducted on April 5, 2012, the United States Postal Inspection Service and the Metropolitan Nashville Police Department were investigating a check fraud scheme that began in August of 2009. On December 2, 2009, a postal inspector received a telephone call from a manager at the Brentwood, Tennessee Post Office, reporting that an individual who previously had presented a fraudulent check at that post office had returned and was attempting to purchase stamps. Postal inspectors immediately responded to that post office and questioned the individual.
That individual provided the postal inspectors a false name and told them that he had arrived at the post office in a a "brown truck" driven by his sister. He said the truck was in a shared retail parking lot immediately west of the post office.
While interviewing the individual, the inspectors observed a champagne-colored Chevrolet Suburban that matched the description of a vehicle reportedly used in previous incidents of check fraud. The postal inspectors approached the Suburban and one of them displayed his badge and identified himself as a police officer to Marsh, who was the driver of the Suburban. Marsh was subsequently ordered to park the vehicle, but instead, rapidly accelerated towards one of the inspectors, causing him to take evasive action to avoid being struck by the vehicle. The vehicle then sped from the parking lot, narrowly avoiding a collision with on-coming traffic.
On December 7, 2009, the United States filed a criminal complaint and obtained an arrest warrant for Marsh, charging her with assaulting a federal officer. That arrest warrant was executed on December 10, 2009. At the time of her arrest, Marsh admitted that she had delivered her cousin to the Brentwood Post Office and that she knew he intended to do something illegal. She acknowledged that she heard and understood the commands of the postal inspectors to park her car, but did not do so.
Marsh entered a plea of guilty on April 5, 2012 to the charge of assaulting a federal officer and her sentencing hearing was scheduled for July 12, 2012. Marsh failed to appear for that sentencing hearing and a bench warrant was issued authorizing her arrest.
During the early morning hours of May 29, 2013, the Nashville Crime Stoppers program received a tip that Marsh was at a hotel in Nashville. Officers from the Metropolitan Nashville Police Department responded to that hotel and arrested Marsh.
This case was investigated by the United States Postal Inspection Service and the Metropolitan Nashville Police Department. The United States is represented by Assistant United States Attorney Byron Jones.
Federal Jury Finds Nashville Man Guilty of Bank FraudRead the Press Release
Keith Churn, 44, of Nashville, Tenn., was found guilty of bank fraud by a federal jury on Friday, December 6, announced David Rivera, United States Attorney for the Middle District of Tennessee.Churn was convicted of seven counts of bank fraud in connection with a scheme to defraud a federally-insured financial institution that had issued loans for the construction of modular homes in Nashville and Franklin, Tennessee. Churn was found not guilty of four additional counts of bank fraud.
“The jury’s verdict confirms that those who seek to profit through fraudulent financial schemes will be held responsible, “said U.S. Attorney David Rivera. “This office and our law enforcement partners remain dedicated to ferreting out and prosecuting all varieties of financial fraud.”
“The Secret Service will continue to aggressively investigate financial crimes, to include mortgage fraud schemes such as the one perpetrated by Mr. Churn, in order to support the integrity of our nation’s financial infrastructure and to bring to justice those that use the financial system to victimize others,” said U.S. Secret Service Special Agent in Charge Todd Hudson.
Evidence at trial showed that Churn made numerous false statements to a Tennessee bank in order to induce additional draws on certain construction loans, the proceeds of which Churn transferred to a bank account under his control, as well as to conceal his scheme and to dissuade the bank from calling these loans. Churn submitted false invoices from a modular home manufacturer, falsely representing that down payments had been made and that modular units had been ordered, and misrepresented the status of construction that had been done to date. The evidence also demonstrated that Churn failed to fulfill his promises to make interest payments on behalf of certain individuals who had applied for the construction loans at issue, causing these loans to be foreclosed.
Churn will be sentenced by United States District Court Chief Judge William J. Haynes, Jr. on a date yet to be determined. He faces a maximum penalty of 30 years in prison for each count, as well as fines and forfeiture of the money derived from the fraudulent scheme.
The U.S. Secret Service conducted this investigation. Assistant U.S. Attorneys Sandra G. Moses and William F. Abely prosecuted the case.
Columbia Man Pleads Guilty to Theft from General Motors Spring Hill Facility and Filing A False Tax ReturnRead the Press Release
Anthony Praino, 51, of Columbia, Tennessee, pleaded guilty yesterday in U.S. District Court to interstate transportation of stolen property and filing a false tax return, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. The charges stemmed from a joint investigation conducted by the Maury County Sheriff’s Office, the FBI and the IRS-Criminal Investigation, which revealed that in 2011 and 2012, Praino stole nearly a million dollars’ worth of equipment from the General Motors (GM)Spring Hill, Tenn. Plant and then failed to disclose to the IRS the $145,000 profit he received from the sale of the stolen equipment.
“Praino stole from his employer and cheated on his taxes in a manner that will always be addressed by the United States Attorney’s Office and its local, state and federal law enforcement partners,” said U.S. Attorney Rivera. “What was accomplished in this case illustrates the commitment of local and federal law enforcement agencies, working together to bring to justice those placed in a position of trust who choose to commit fraud at a significant cost to their employers and to the public.”
Testimony presented at the guilty plea hearing before District Judge Todd Campbell established that in 2011 GM investigators discovered that a significant amount of expensive equipment was missing from their Spring Hill plant, where Praino was employed as a fork lift operator. Praino emerged as the prime suspect when GM investigators identified some missing equipment being advertised for sale on eBay, and then clandestinely purchased it.
When the equipment was delivered to them, the return address for the sender was determined to be Praino’s. GM referred the matter to the Maury Count Sheriff’s Office, who in turn alerted the FBI and the IRS, given the value and volume of the stolen property.
In April 2012, while agents were conducting surveillance, they observed Praino depositing a large parcel for delivery by a commercial shipping company. Agents quickly determined that the package contained expensive, stolen GM equipment, and was to be delivered to Thailand. Agents obtained and executed a search warrant for Praino’s home in Columbia, Tenn. and found more equipment that had been stolen from the Spring Hill GM facility, which was worth over $500,000.
Follow up investigation disclosed that Praino had received more than $145,000 from selling the stolen GM equipment, which he failed to disclose when filing his tax return. He owed, but failed to pay about $48,000 in additional income tax for that income, which constituted a second separate federal crime. Praino faces a maximum of 13 years in prison and an order of restitution.
“IRS Criminal Investigation Special Agents have both law enforcement and financial
investigative expertise, which makes them uniquely qualified to assist state and federal law enforcement agencies with these types of investigations by following the money, added Christopher A. Henry, Special Agent in Charge of the IRS Nashville Field Office. “Often times, in addition to the initial scheme to defraud, federal tax laws are also violated which can lead to additional jail time. We are proud to work with our law enforcement and prosecutorial partners at the U.S. Attorney's Office, the FBI and the Maury County Sheriff's Office to obtain today's result and hold those responsible accountable for their actions.”
"Today's guilty plea is a prime example of how law enforcement from different agencies and departments can pool their collective operational and investigative efforts and resources to bring the most egregious financial crimes facilitators to justice in all of our communities. The thefts from the General Motors Spring Hill Plant not only represent thefts from General Motors, but from each and every American taxpayer as well," said A. Todd McCall, Special Agent in Charge of the FBI Memphis Division. “The FBI is proud to work investigations such as this alongside the U.S. Attorney's Office, The IRS Criminal Investigation Division, and the Maury County Sheriff's Office to bring these types of criminal violators to justice
The case was investigated by the FBI, the IRS-Criminal Investigation and the Maury County Sheriff’s Department. The government was represented by Assistant U.S. Attorney Hilliard Hester.Nashville Gang Member Convicted of Drug Trafficking and Firearms Offenses Near Elementary SchoolRead the Press Release
Christopher Ray Moody, 29, of Nashville, Tenn., was found guilty yesterday by a federal jury of multiple drug trafficking and firearms offenses, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Moody’s crimes were committed from 2008 – 2011 and many were committed in and around specially protected areas around schools and public housing.
“This case is an example of an individual who apparently has no intention of turning away from a lifestyle of crime, as evidenced by his plans to continue dealing drugs after being released from jail,” said U.S. Attorney David Rivera. "The defendant faces a substantial sentence that, if imposed, should reduce the threat of drug dealing and illegal gun possession in this community."
According to the proof at trial, Moody was a street gang member and repeatedly cooked multiple ounces of crack cocaine for distribution at a residence near Jones Paideia Elementary School, in Nashville. Moody kept firearms at this location, including a compact semi-automatic style firearm which he had previously obtained in a drug transaction.
Moody was arrested on unrelated state charges in April 2009. While he was incarcerated on these charges, investigators determined that Moody had instructed his girlfriend to hold his drugs and a gun for him so that he could start drug trafficking again when he completed his state sentence. Moody was released from custody in May 2010 and the evidence showed he went back to drug trafficking at the same residence.
A federal search warrant was issued in February 2011 and resulted in the Moody’s arrest, as well as the seizure of evidence showing that he cooked crack cocaine. Shotgun shells were also found at the home and the trial proof showed that Moody possessed a shotgun at that location during drug deals. Moody was also a previously convicted felon, and was found to be illegally in possession of firearms and ammunition.
Moody will be sentenced on February 14, 2014, by Chief Judge William Haynes, Jr. Because of Moody’s prior felony record involving multiple drug trafficking felonies and a robbery-related conviction, he is exposed to a sentence of up to life in prison. The investigation was conducted by the FBI and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorneys Sunny A.M. Koshy and Lynne T. Ingram represented the United States.
Former Nolensville Police Officer Sentenced to PrisonRead the Press Release
Kenneth Lee, 53, of Nashville, Tenn., was sentenced yesterday in U.S. District Court to 12 months and a day in prison, followed by one year of supervised release, for honest services mail fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Lee was indicted by a federal grand jury on March 1, 2012, and charged with extortion and mail fraud arising from his solicitation of payment from a woman in exchange for not arresting her. Lee pleaded guilty on July 29, 2012, to honest services mail fraud.
“Law enforcement officers who choose to step across the line can expect to face federal prosecution and time in federal prison,” said U.S. Attorney David Rivera. “The honest, hard-working men and women of the greater law enforcement community are never tolerable of those who violate their oath and abuse their power.”
According to the testimony at the plea hearing, on August 17, 2011, while employed as a Nolensville police officer, Lee stopped a woman for a suspected traffic violation. After learning that she did not have a driver’s license, Lee told her he would not arrest her if she paid him $200. Lee also acknowledged that he subsequently received three separate money orders totaling $200.
In imposing the sentence Chief U.S. District Judge William J. Haynes, Jr., stated that he was troubled that the victim of the crime was poor and that a child was present when the defendant asked for money in lieu of arresting the victim.
The case was investigated by the FBI and the United States Postal Inspection Service and prosecuted by Assistant United States Attorneys Scarlett Singleton and Jimmie Lynn Ramsaur.
Three Felony Lane Gang Defendants Plead GuiltyRead the Press Release
B Christopher Wilcox, 30, and Parrish Roberts, 21, both of Ft. Lauderdale, Florida and Ricardo Ronodean Mitchell II, 23, of Coral Springs, Florida, pleaded guilty yesterday in U.S. District Court, to conspiracy to commit bank fraud as part of the group known as the “Felony Lane Gang,” announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
These defendants were part of a group of five individuals arrested in Nashville on October 4, 2012, while being sought by the FBI and local area law enforcement after receiving an alert from Regions Bank Corporate Security days earlier.
“The crimes committed by members of the ‘Felony Lane Gang’ are particularly egregious, considering the tens of thousands of dollars they fraudulently obtain and the number of victims left in their wake to deal with identity theft issues,” said U.S. Attorney David Rivera. “These crimes expend the resources of many law enforcement agencies during the subsequent investigations. This is an example of the great work and cooperation between our law enforcement partners and the corporate sector.”
Each of the three defendants entered into plea agreements in which they pleaded guilty to one count of conspiracy to commit bank fraud. In their plea agreements the defendants admitted that the following tactics are the usual methods that members of the “Felony Lane Gang” employ to commit their crimes: that their members are normally based in south Florida, and from there travel the country in rental vehicles; that they target gyms, parks, daycare centers and sporting events likely to be frequented by women and increasing the chances of finding purses left in vehicles; that they conduct surveillance at these locations and unlawfully enter vehicles through unlocked doors or by using a window punch to break the window of a locked vehicle; that they specifically look for identification such as driver licenses, checks and debit cards.
The suspects then recruit females who are normally prostitutes and/or drug addicts to assume the identities of the theft victims in order to cash stolen checks belonging to other victims. The suspects normally supply the recruited check cashers with wigs in order to create a physical appearance similar to that of the victims whose identification was stolen. The check cashers normally use the farthest drive through lane from the bank building to conduct the fraudulent transactions, hence earning their nickname as the “Felony Lane Gang.”
"This plea is the result of the excellent investigative work of all of the law enforcement agencies involved, and the desire to end the targeting of victims throughout our communities," said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. "The crime of financial fraud is a priority for the FBI and we will continue to work with our partners to bring those who commit it to justice."
Defendants Wilcox, Roberts, and Mitchell admitted in their plea agreements that they targeted Nashville on or around October 2 – 4, 2012 as part of a group attempting to pass stolen checks at Regions Bank. Investigators recovered four stolen driver’s licenses and four stolen bank cards from outside a hotel where the defendants’ rental vehicles had been seen. The plea agreement stated that the loss amount for their fraud totaled $33,000.Wilcox, Roberts, and Mitchell each face up to 30 years in prison and a $1,000,000 fine on the conspiracy charge.
The remaining defendants, Dwayne Donton, Wilson, and Jillian Bysong, are scheduled for trial on June 17, 2014, in U.S. District Court in Nashville. They are presumed innocent unless and until proven guilty.
The case was investigated by the FBI; the Metropolitan Nashville Police Department, the Nashville Airport Department of Public Safety; and police departments from Brentwood, Springfield, Hendersonville, Gallatin, Smyrna and Murfreesboro, Tennessee; with the assistance of the Regional Organized Crime Information Center (ROCIC).
The United States is represented by Assistant United States Attorney Scarlett M. Singleton.
Prominent Nashville, Tennessee Pediatrician and Former Owner of Centennial Pediatrics Pleads Guilty to Health Care FraudRead the Press Release
Agreements Includes 20-Year Exclusion from Federal Health Care Programs and Over $1.6 Million in Criminal Restitution and False Claims Act Damages
Dr. Edward “Eddie” Hamilton, 54,of Nashville, Tenn. and former owner of the medical practice of Centennial Pediatrics, P.C., pleaded guilty yesterday in U.S. District Court to a misdemeanor count of health care fraud, announced David Rivera, United States Attorney for the Middle District of Tennessee. The plea comes as part of a global resolution of criminal and civil violations of the False Claims Act (“FCA”).
Pursuant to the criminal plea and civil settlement, Hamilton is excluded from participation in in all federal health care programs for 20 years and is ordered to pay criminal restitution and FCA damages totaling over $1.6 million.
Hamilton was also required to divest himself of his ownership of Centennial Pediatrics medical practice and the sale of the Centennial Pediatrics’ assets was finalized on October 31, 2013. This resolution allowed for continuity of care for thousands of TennCare patients and other children who receive health care services from other physicians at Centennial Pediatrics.
“The penalties set forth in the plea agreement and the civil settlement should send a clear message to those who defraud health care programs, especially those programs intended to help our nation’s most vulnerable people-our children,” said U.S. Attorney David Rivera. “The terms of the settlement and plea agreement provide for a substantial penalty and allow necessary medical care to continue without interruption for thousands of Tennessee’s children.”
The global settlement resolves allegations by the United States and Tennessee that Dr. Hamilton, through Centennial, from about January 2007 through November 2012, knowingly upcoded billings for infant auditory screening exams to Tennessee’s Medicaid program (“TennCare”) and commercial insurance programs. Specifically, Centennial billed for the infant hearing exams that it performed at Baptist Hospital as comprehensive auditory exams, even though it only performed the less expensive auditory screens. The investigation revealed that Centennial did not even have equipment capable of performing the comprehensive tests for which it billed.
Also, according to the plea agreement, Hamilton admitted that through numerous Centennial clinics, he systemically billed for urinalysis testing as though its office had performed a microscopic examination of the sample despite the fact that no microscopy had been performed. Centennial upcoded its billings in this manner even though its clinics did not own or possess the microscopes necessary to conduct such examinations.
Hamilton also admitted in the plea agreement that he was told on multiple occasions and in writing by members of his staff, including his own audiologists, that the infant audiology service Centennial was billing was not being performed. Hamilton denied repeated requests from Centennial audiologists to purchase the diagnostic testing equipment necessary to perform the more comprehensive tests being billed. With respect to the fraudulent urinalysis, other Centennial physicians, including Hamilton’s medical director, notified Hamilton of the improper urinalysis billing at the Centennial pediatric clinics. Despite being advised of the improperly billed services, Hamilton directed that the higher reimbursement codes continue to be billed by his company.
“Medicaid fraud steals from the taxpayers and diverts precious resources from those who need it most," said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services- Office of Inspector General in Atlanta. “This settlement will send a message to health care providers that they must provide to beneficiaries the services Medicaid has paid for and that the United States government will take seriously any failure to do so.”
“This plea is the result of the cooperation between the FBI and our law enforcement partners and reflects the long hours of investigation and hard work spent building a strong case,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “Health Care Fraud is a priority for the FBI and we will continue to target those who criminally manipulate the health care system for their own personal gain and make victims of us all.”
Mark Gwyn, Director of the Tennessee Bureau of Investigation, which houses the Tennessee's Medicaid Fraud Control Unit, stated, “Fraudulent billing of Medicaid will not be tolerated. The TBI is committed to protecting the TennCare program, which is intended to support those who need the help. This case is yet another example of how state and federal investigators will work together to hold health care providers accountable, both civilly and criminally, for wrongfully billing TennCare.”The criminal investigation and the joint federal and state civil investigation corroborated conduct originally alleged in a qui tam complaint filed pursuant to the FCA. The qui tam provision of the False Claims Act allows for whistleblowers, or relators, to file suit for violations of the act on behalf of the government. The relator is entitled to a percentage of the amount recovered by the government as a result of the information provided that resulted in the subsequent investigation and prosecution.
This matter was investigated by the Department of Health and Human Services Office of Inspector General, the FBI, the Tennessee Bureau of Investigation, the Tennessee Attorney General’s Office, and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorneys Lisa Rivera and Christopher C. Sabis.
Former High School Football Player Pleads Guilty to Making Racially Motivated Threats to African-American Assistant Football CoachRead the Press Release
WASHINGTON – Jonathan Caine, 20, of Nashville, Tenn., pleaded guilty today to a federal hate crime for making racially motivated threats to an African-American assistant football coach at a local high school, the Justice Department announced.
Caine, formerly a student and football player at the high school where the victim works as a coach, pleaded guilty to threatening the victim with violence because of the victim’s race and employment before U.S. Magistrate Judge John Bryant in federal court in Nashville, Tenn.
According to the information presented in court, Caine made repeated anonymous threats to the assistant coach, and others in the high school administration, which included racial slurs and references to violent acts. In court, Caine admitted that on Aug. 10, 2012, he left an anonymous threatening voice mail on the assistant coach’s cellular phone, saying, “And thus sayeth the Lord all [epithet] shall be killed. Amen, amen I say to you [unintelligible] as the Lord Christ says if a [epithet] shall be born unto thee, the [epithet] shall be killed.” Caine admitted that he targeted the coach because of the coach’s race. Prior to law enforcement identifying Caine as the caller, the team took security measures to protect the coach.
“The Department of Justice will not hesitate to prosecute such acts of hate-motivated intimidation,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Hate crimes have no place in our society; not only did this former student and player threaten his coach’s safety, he violated the victim’s civil rights by using racist, discriminatory language. The Civil Rights Division will remain vigilant in our efforts to bring these individuals to justice.”
“When individuals choose to act out their hatred by making threats based on a person’s race, they can expect to face prosecution by the U.S. Attorney’s Office,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “Every arm of the Justice Department is committed to protecting the civil rights of all individuals and insuring they remain free from acts of violence and intimidation when those acts are based on the color of their skin.”
Sentencing is scheduled for Feb. 24, 2014. Caine faces a statutory maximum penalty of a 12-month sentence in prison and a $100,000 fine.
The case was investigated by the Nashville Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Nicholas Murphy of the Civil Rights Division.
Arizona Man Pleads Guilty to Conspiracy to Launder Money in Scheme to Defraud NissanRead the Press Release
Adrian Franklin, 40, of Chandler, Arizona, pleaded guilty on November 18, 2013, to participating in a scheme to defraud Nissan North America, announced David Rivera, United States Attorney for the Middle District of Tennessee. Franklin pleaded guilty to one count of conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison and a fine of $500,000.
According to the plea agreement, Franklin admitted to participating in a conspiracy to launder money derived from a scheme to defraud Nissan by recruiting others to obtain the names of Nissan owners and the corresponding Vehicle Identification Numbers (“VINs”), to submit false claims for repair to Nissan. When Nissan issued a check to the vehicle owner for the bogus repair claim, the owner would deposit the check into his or her bank account and then pay a portion of the funds to Franklin and a portion to others involved in the scheme.
Franklin was charged in an indictment that also named five other defendants: Kenneth Carter, 44, of Corona, CA; Francisco DeLaRosa, 40, of West Covina, CA; Bruce Young, 49, of Compton, CA; Tracey Young, 45, of Los Angeles, CA; and Wendell Young, 34, of Inglewood, CA. The indictment charged conspiracy, mail fraud, and conspiracy to commit money laundering, and alleged that Nissan lost approximately $571,500 as a result of the scheme.
An indictment is merely an accusation and is not evidence of guilt. All remaining defendants are presumed innocent unless and until proven guilty in a court of law. The trial of the remaining defendants is set for February 25, 2013, in U.S. District Court, before Chief Judge William Haynes.
The case was investigated by the IRSB Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorney Kathryn B. Ward represents the government.
Crossville Man Pleads Guilty to Manufacturing Counterfeit CurrencyRead the Press Release
Ronald Thacker, 48, of Crossville, Tennessee, pleaded guilty yesterday in U.S. District Court to two counts of counterfeiting United States currency, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
At his plea hearing, Thacker admitted manufacturing counterfeit $50 bills in Nashville in May 2012, and using the counterfeit bills to purchase food at restaurants and to purchase items from retail stores. Thacker also admitted manufacturing counterfeit $50 bills in Crossville, Tennessee in August 2012 and using or attempting to use the counterfeit bills at restaurants and retail stores.
Thacker is scheduled to be sentenced on January 31, 2014, by Judge Todd J. Campbell. He faces a maximum sentence of twenty years in prison on each count.
This case was investigated by agents of the United States Secret Service, the Metropolitan Nashville Police Department and the Crossville Police Department. The case was prosecuted by Assistant United States Attorney William F. Abely.Brentwood Businessman Sentenced to Twenty-Four Months in Prison for Bank FraudRead the Press Release
B Joseph D. Wheliss, Jr., 44, of Brentwood, Tennessee, former owner and operator of National Embroidery Works, Inc., was sentenced on October 25, 2013, by Chief United States District Court Judge William J. Haynes, Jr. to twenty-four months in prison, to be followed by a five year term of supervised release and an additional seventeen months in a halfway house, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. Wheliss was also ordered to pay approximately $1.9 million in restitution to Pinnacle National Bank and $2.85 million in restitution to Cincinnati Insurance Company.
Wheliss pleaded guilty on October 5, 2012, to a single count of bank fraud, arising from a fraudulent loan scheme. Between May 2005 and January 2011, Wheliss sought and received multiple loans from Pinnacle National Bank totaling more than $4 million. The majority of the loans were commercial loans to Wheliss' business, National Embroidery Works, Inc. To collateralize each of these loans, Wheliss pledged his purported interest in a trust fund which he knew was non-existent.
During the five year period of the scheme, Wheliss regularly presented forged documents to Pinnacle National Bank purporting to show the balance of the fictitious trust fund growing from approximately $2.7million to over $19 million. As a result of this fraudulent scheme, Wheliss obtained over $4.7 million in loans from Pinnacle National Bank, which he used to fund his living expenses and lavish lifestyle.
The case was investigated by the FBI and the Special Inspector General for the Troubled Asset Relief Program. The United States was represented by Assistant U.S. Attorney Sandra G. Moses.Madison Man Receives 45 Month Sentence for CounterfeitingRead the Press Release
Calvin Strange, age 48, of Madison, Tennessee, was sentenced yesterday by U.S. District Judge Aleta A.Trauger, to serve 45 months in prison, followed by 3 years of supervised release, for using a counterfeiting device to produce counterfeit U.S. currency, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
On July 15, 2013, Strange pleaded guilty to possession of counterfeit currency. Evidence offered at the plea hearing established that in August 2011 Strange possessed 26 uncut pages of paper with four counterfeit $5 bills on each page, as well as 144 additional counterfeit $5 bills. In addition, Strange admitted that he knew that these bills were counterfeit and that he possessed a counterfeiting device or materials used for counterfeiting.
“Counterfeit currency causes great harm to a range of unknowing victims, from small, local businesses to large financial institutions,” said Acting U.S. Attorney David Rivera. “This sentence should send a message that federal law enforcement will continue to aggressively investigate and prosecute counterfeiting offenses.”
This case was investigated by agents of the United States Secret Service, with assistance from the Metropolitan Nashville Police Department. The case was prosecuted by Assistant United States Attorney William F. Abely.Three Charged with Fradulent Conduct Related to the Upper Cumberland Development DistrictRead the Press Release
Wendy Askins, 53, of Cookeville, Tenn., Larry Gene Webb, 64, of Smithville, Tenn. and Billy Michael Foster, 66, of Smithville, Tenn., were indicted yesterday by a federal grand jury and charged with various federal offenses related to theft and fraud from the Upper Cumberland Development District (UCCD), announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. UCCD is a quasi-governmental economic development resource for the fourteen counties in the Upper Cumberland Region that was established by the Tennessee General Assembly and was funded in part by state and federal grants.
Askins and Webb were charged with conspiring to commit various federal offenses as well as six counts of theft and conversion of government property in excess of $1,000; four counts of bank fraud; three counts of money laundering; and a single count of concealing a material fact within the jurisdiction of the United States. Additionally, Askins and Foster were charged with a single count of making a false statement regarding a matter within the jurisdiction of the United States.
“Once again, we will reiterate that those who seek to profit by defrauding the taxpaying public and misusing government funds will be held accountable,” said Acting U.S. Attorney David Rivera. “The personal gain and lavish lifestyles gained by fraudulent schemes will eventually come to an end. Public corruption remains a top priority of the U.S. Attorney’s Office and our partner law enforcement agencies.”
According to the indictment, Askins, who was the Executive Director of the UCDD, and Webb, who was the Deputy Director of UCDD, perpetrated a scheme from February 2010 through February 2012 to convert over $670,000 of government funds intended for UCDD and its related agencies to the use of the “Living the Dream” property, which was owned by Askins and Webb. Askins and Webb incorporated Living the Dream in their own names and caused money to be transferred from UCDD to Living the Dream without seeking the approval of the UCDD Board of Directors. Askins and Webb also obtained bank loans and lines of credit in excess of $1,000,000 to renovate the Living the Dream property by using UCDD bank accounts and property as collateral for the loans.
In order to cover up the illegal activity, Askins and Webb directed other individuals to alter the official minutes of the UCDD board meeting that occurred on February 16, 2010, and to delete audio recordings of all UCDD meetings. Askins prepared a false statement, which was read by Foster, who at the time was the chairman of the UCDD Executive Committee and Board of Directors, at a UCDD board meeting on January 19, 2012. Foster knew the statement was false when he read it.
“This indictment should send a signal to those who would seek to take advantage of a position of trust for personal gain,“ said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The FBI and our law enforcement partners place a priority on investigating these crimes, and will continue to work to ensure that those who violate the law are held accountable.”
Christopher A. Henry, Special Agent in Charge, IRS Criminal Investigation,
Nashville Field Office, said, “IRS Criminal Investigation is committed to investigating and prosecuting those who defraud state and federal grant programs and sending a clear message that
these violations are serious crimes against the American public. Our special agents provide the financial expertise in following the money.”
“This is a prime example of a combined investigative effort, successfully exposing grant fraud and protecting taxpayer monies,” said Todd Zinser, Inspector General for the U.S. Department of Commerce- OIG.
If convicted, Askins faces up to two hundred and twenty-five years in prison and a $6,750,000 fine as well as forfeiture of property derived from or used in the bank fraud and money laundering offenses charged. Webb faces up to two hundred and twenty years in prison and a $6,500,000 fine, as well as forfeiture of property derived from or used in the bank fraud and money laundering offenses charged, and Foster faces up to five years in prison and a $250,000 fine.The case was investigated by agents with the U.S. Department of Health and Human Services, Office of the Inspector General, the U.S. Department of Commerce, Office of Inspector General, the IRS- Criminal Investigations and the FBI, with assistance from the U.S. Department of Housing and Urban Development- Office of Inspector General. The United States is represented by Assistant U.S. Attorneys Darryl Stewart and Scarlett Singleton.
An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.
Minister and Former Bail Bondsman Sentenced to Prison for Tax FraudRead the Press Release
Kenneth L. Richardson, 50, of Nashville, Tennessee, was sentenced on September 23, 2013, to 6 months in prison and ordered to pay $269,391.96 in restitution to the IRS for filing a false federal income tax return for tax year 2004 and for willfully failing to file a federal income tax return for tax year 2005, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. Richardson was also sentenced to six months of home confinement to be served during one year of supervised release following the term of imprisonment.
At sentencing, the Court noted the seriousness of the offenses but cited mitigating factors in support of its decision.
Richardson pleaded guilty in September, 2012, pursuant to a plea agreement. According to the plea agreement, Richardson owned and operated Skyy Bonding Company in Nashville, Tennessee and was also employed as a pastor at St. Marks Church in Nashville. He received income from his bail bonding business and from his employment as a pastor during the tax years 2004 through 2007.
Richardson and his wife earned at least $248,174 in adjusted gross income during tax year 2004. In November 2005 Richardson filed a false Form 1040, indicating that their adjusted gross income for tax year 2004 was only $52,714.
During tax year 2005, the Richardson’s earned at least $291,174 in adjusted gross income and were therefore required to file a federal income tax return for that tax year. Richardson, however, willfully failed to file a return during the time required by law.
The case was investigated by the Internal Revenue Service- Criminal Investigation. The United States was represented by Assistant U.S. Attorney Kathryn B. Ward.
Clarksville Gang Leader Sentenced to 16 1/2 Years in Federal PrisonRead the Press Release
Brian Vance a/k/a Birdman, 30, of Clarksville, Tennessee, was sentenced yesterday to 16 ½ years in prison, followed by five years of supervised release, for drug conspiracy, accessory after the fact to a drug-related robbery/murder and conspiracy to commit a separate drug-related robbery, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
In sentencing Vance, Judge Kevin Sharp noted that Vance served in a leadership role in the gang and drug activity, showed a “complete lack of respect for the law,” and that people who stood ready to take Vance’s position needed to be deterred. Judge Sharp imposed the 200 month sentence against Vance in consideration of these factors, balanced against Vance’s lack of any criminal history and other mitigating factors.
“This is a significant sentence and it should have a significant impact on criminal gang activity in the Clarksville community,” said Acting U.S. Attorney David Rivera. “We hope that it serves to deter others who are tempted to take over Vance’s position or otherwise engage in criminal gang activity.”
Vance pleaded guilty to the charges on June 10, 2013. According to the statement of facts presented at the hearing, Vance was involved in a drug trafficking conspiracy responsible for distributing cocaine and crack cocaine in the Clarksville area, particularly in the publicly funded Summit Heights housing development.
A lengthy wiretap investigation, authorized by the district court, enabled investigators to expose the conspiracy and uncover murders which occurred in Clarksville and Stewart County, Tenn. The investigation also determined that Vance obtained cocaine from Robert Porter and cooked most of that cocaine into crack cocaine, which he distributed to co-conspirators, including many fellow Vice Lord members.
Porter has also pleaded guilty to the drug conspiracy and is scheduled for sentencing on October 1, 2013.
Vance also provided drugs to his brother, James Farley, Jr., who took the drugs to Stewart County, Tenn. and intended to re-sale them. The buyers, however, tried to rob Farley of the drugs and during the robbery attempt, Farley shot and killed one of the robbers and attempted to kill the other one.
In another incident, three other co-conspirators, who are still pending trial and presumed innocent, are alleged to have killed Raymond Caston in Clarksville while conducting an armed home invasion robbery. Vance then helped these individuals flee Clarksville. Two of them were eventually arrested in Memphis, Tenn., and the third individual returned to Clarksville and conspired with Vance and another person to commit yet another drug-related robbery. That robbery was foiled as a result of the ongoing wiretap investigation.
The investigation was conducted by the Drug Enforcement Administration, the Tennessee Bureau of Investigation and the Clarksville Police Department, with assistance from other local and federal agencies. Assistant U.S. Attorneys Sunny A.M. Koshy and Lynne Ingram represented the United States.
Owners of Tennessee Trucking Companies Charged in 13-Count Federal IndictmentRead the Press Release
Dorian Ayache, 65, of Lebanon, Tenn. and Theresa Vincent, 53, of Murfreesboro, Tenn. were indicted yesterday by a federal grand jury on charges related to the violation of U.S. Department of Transportation (DOT) regulations, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. The indictment charges Ayache with nine counts of violating DOT regulations, one count of conspiring to defraud the United States, and two counts of obstructing a grand jury investigation. Vincent was charged with conspiring to defraud the United States and with one count of perjury.According to the indictment, Ayache was the owner and operator of Three Angels Farms, an interstate commercial motor carrier based in Lebanon, Tenn., and Vincent was the owner and supposed operator of Terri’s Farm, an interstate commercial motor carrier based in Murfreesboro, Tenn.
In June 2012 DOT deemed that the operations of Three Angels Farms posed an imminent hazard to public safety and issued an order requiring Ayache to cease commercial motor vehicle operations. DOT’s Order was based on Ayache’s unacceptable safety practices, including his failure to adequately maintain his commercial motor vehicles and his failure to ensure that drivers were qualified, and cited 2012 accidents on I-40 and I-24 in Tennessee that resulted in fatal injuries to horses being transported.
The indictment alleges that, in violation of this order, Ayache continued his commercial motor carrier operations under the name and authority of Terri’s Farm, as well as under other names. DOT later categorized Terri’s Farm as a mere continuation of Three Angels Farm.
The indictment also alleges that Ayache concealed and attempted to destroy emails with the intent to impair their availability for use in the grand jury investigation and that Vincent made false statements under oath to a grand jury regarding her communications with Dorian Ayache during the investigation.
If convicted, Ayache faces up to 20 years in prison on each obstruction charge, up to 5 years in prison on the conspiracy charge, and up to 1 year in prison for each charge of violating DOT regulations. Vincent faces up to 5 years in prison on both the conspiracy count and the perjury charges, if convicted.
The case was investigated by the United States Department of Transportation, Office of Inspector General. The United States is represented by Assistant U.S. Attorney William F. Abely.
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.
Lebanon Man and Vice Lord Leader Convicted of Drug Conspiracy and Related Firearms ChargesRead the Press Release
Trial Results in Conviction of Last of 17 Defendants
Sterling Rivers a/k/a “little Real”26, of Lebanon, Tennessee was found guilty by a federal jury yesterday, of engaging in a conspiracy to distribute large quantities of crack cocaine and cocaine, as part of his involvement in a criminal street gang called the Unknown Vice Lords, announced David Rivera, Acting U. S. Attorney for the Middle District of Tennessee. Because the jury could not reach a decision on one count related to possessing a firearm during a drug crime, another trial is scheduled for November 19, 2013.
Rivers was indicted with 16 other individuals in September 2011 following a nearly two year investigation into a national street gang, the Vice Lords, operating in Wilson and Putnam County, Tennessee and beyond. Rivers fled following his indictment and was arrested in October 2011 as a fugitive in Texas.“This verdict is just another example of the U.S. Attorney’s Office and our law enforcement partners’ tireless commitment to combating criminal street gangs in the Middle Tennessee area,” said Acting U.S. Attorney David Rivera. “This and other recent convictions of gang members should send a clear and convincing message that violent gang activity in this district will be met with the necessary resources required to eliminate such activity and to hold those accountable who choose to inflict violence upon our communities.”
The verdict followed a two-week trial, during which Rivers represented himself. Proof at trial established that Rivers was engaged in organizing the Vice Lords Gang throughout the state of Tennessee and had been involved in an array of violent crime, including the robbery of another drug dealer and the shooting of another individual. Rivers is the last defendant to be tried in this case and faces a maximum penalty of life in prison.
Fifteen co-defendants have pleaded guilty and Monique “Money” Smith was tried and convicted in October 2012 and was sentenced to life, plus five years in prison.
This investigation was conducted by the FBI, the Lebanon Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Tennessee Bureau of Investigation and the Tennessee Highway Patrol. This case was prosecuted by Assistant United States Attorneys Braden H. Boucek and Brent Hannafan.
Convicted Felon Found Guilty of Federal Firearm and Drug ChargesRead the Press Release
Albert Franklin, Jr., a/k/a Frank Nitty, 51, of Nashville, Tennessee was convicted by a jury in U.S. District Court in Nashville yesterday, of conspiring to possess with the intent to distribute Oxycodone; using, carrying, and brandishing a firearm during a drug trafficking crime; and possession of a firearm by a convicted felon, announced David Rivera, Acting U. S. Attorney for the Middle District of Tennessee; Jeffrey Fulton, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives; and Steve Anderson, Chief, Metropolitan Nashville Police Department..
“We are pleased with the jury’s verdict and will seek a sentence that will insure the defendant and his violent acts are removed from this community for a long period of time,” said Acting U.S. Attorney David Rivera. “This verdict exemplifies the continued efforts of federal and local law enforcement officers to vigorously investigate and prosecute individuals who commit gun and drug crimes in our community.”
According to testimony at trial, in January 2010 the Metro Nashville Police Department was conducting a reverse sting operation using a confidential informant. A meeting was set up between the informant and Albert Franklin, a convicted felon and owner of Mustang Sally’s Bar on Dickerson Pike, for the purpose of consummating a drug deal. Co-defendant, Anthony Griffin was also present. Franklin was supposed to purchase 3,000 Oxycontin pills from the informant. When the informant produced the pills, which were actually placebos, Franklin produced a loaded revolver, put it to the informant’s head, and robbed him of the pills, which he believed to be Oxycontin.
Franklin then forced the informant from the bar at gunpoint and a stand-off ensued shortly thereafter with the Metro Nashville Police Department. After approximately one hour, Franklin surrendered to police. The firearm used in the robbery was recovered from inside an interior wall of the bar.
“ATF remains committed to vigorously investigating violent crime and making our communities safer,” said Jeff Fulton, Special Agent in Charge of the ATF.“Albert Franklin posed a significant danger to the East Nashville community and decided to continue breaking the law despite prior serious convictions,” Metro Police Chief Steve Anderson said. “I am grateful to the U.S. Attorney’s Office and our federal law enforcement partners for helping ensure that those who repeatedly challenge the safety of our neighborhoods are held fully accountable.”
Franklin will be sentenced by Chief U.S. District Judge William J. Haynes, Jr., on December 6, 2013. He faces a maximum sentence of life in prison.
Co-defendant Anthony Griffin is awaiting trial and is presumed innocent unless and until proven guilty.This case was investigated by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The United States was represented by Assistant United States Attorneys Philip H. Wehby and Lynne T. Ingram.
Federal Jury Convicts Three Clarksville Men of Drug and Gun Charges After Three Week TrialRead the Press Release
Each Faces Mandatory Life in Prison
Demetrius Duncan a/k/a Whirley, 32, Alto Parnell a/k/a Al-Pistol, 31, and Chris Young a/k/a Soldier C, 25, all of Clarksville, Tennessee, were convicted Friday in U.S. District Court, of operating a drug conspiracy and related firearms charges, after a three week jury trial, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
The investigation targeted a drug distribution network which operated in and around the Clarksville, Tennessee area and included two murders and numerous armed robberies. To date, the investigation has resulted in charges against 33 individuals, 28 of whom have been convicted. Thirteen defendants have already received lengthy prison sentences and the remaining defendants are awaiting trial or sentencing.
“This was a large scale drug conspiracy which required substantial resources and court-authorized wiretaps to dismantle,” said Acting U.S. Attorney David Rivera. “Each of these convicted defendants has multiple prior, felony drug convictions and previous prosecutions and sentences obviously did not deter them from continuing to harm the community. The jury’s verdict should now insure that they will never have another opportunity to return to the community to engage in their usual criminal enterprise.”
During the trial, the government introduced evidence, including wiretapped telephone conversations, which showed that Duncan, Parnell and Young were part of a larger drug distribution conspiracy and had distributed substantial amounts of cocaine and crack cocaine in the Clarksville area, including near public housing developments.
Other evidence introduced at trial, showed that during one drug deal, Chris Young had a loaded firearm in his possession and also had $10,000 cash as he attempted to take delivery of cocaine near a school in Clarksville, Tenn. When agents later executed a search warrant at the home of Demetrius Duncan, they found him attempting to flush cocaine and marijuana down the toilet. Firearms were also found in the home. Young and Duncan both have multiple prior felony convictions and were also convicted of being convicted felons in possession of firearms.
Proof introduced against Alto Parnell included recorded conversations between him and Brian Vance, a Clarksville Vice Lord gang leader, discussing the fact that they were going to provide drugs to younger gang members to sell, and discussing how poorly the gang members would fare if Parnell and Vance were to be arrested. Vance previously pleaded guilty to drug conspiracy and conspiracy to commit armed robbery and is pending sentencing.
The investigation was conducted by the Drug Enforcement Administration, the Tennessee Bureau of Investigation, and the Clarksville Police Department, with assistance from other local and federal agencies. Assistant U.S. Attorneys Sunny A.M. Koshy and Lynne Ingram represented the United States.
All defendants currently awaiting trial are presumed innocent unless and until proven guilty in court.
Former Franklin, Tennessee Business Owner Sentenced to 31 Years in Prison for Fraud SchemeRead the Press Release
Richard Olive Also Ordered to Pay Over $5.9 Million in Restitution to 190 Victims
Richard Olive, 49, of Vero Beach, Florida, formerly of Nashville, was sentenced today to serve 31 years in prison and ordered to pay $5,992,181.24 in restitution to approximately 190 victims for crimes related to his operation of National Foundation of America (“NFOA”), announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. Olive was convicted by a federal jury on March 7, 2013, on charges of mail fraud, wire fraud, and money laundering.
“The sentence imposed by the Court today should send a strong message to those who would attempt to engage in any scheme sophisticated or otherwise, which may be designed to defraud elderly persons and others who are particularly vulnerable,” said Acting U.S. Attorney, David Rivera. “The U.S. Attorney’s Office and our law enforcement partners simply will not stand for such schemes to continue and will devote whatever resources are necessary to protect the elderly from such financial predators and bring them to justice.”
The evidence at trial showed that from January 2006 through May 2007, Olive represented that NFOA, which was headquartered in Franklin, Tennessee, was a charitable organization that had been recognized by the IRS as a 501(c)(3) organization. During the scheme, Olive solicited assets, including annuities and real estate, of over $30 million from elderly individuals and promised that, in return, the individuals would receive an “installment bargain contract” issued by NFOA that would give them a “guaranteed payout over a guaranteed period of time,” as well as a “generous tax deduction.”
Olive promised clients that in exchange for an NFOA “installment bargain contract,” they would receive a fixed payment for a number of years. However, the evidence at trial demonstrated that NFOA never had sufficient assets to meet these obligations. The majority of assets which Olive solicited were annuities, which incurred high penalties on their surrender. When Olive received these annuities, he surrendered them, incurring penalties, so that he could access the cash. He then used the cash to fund his lavish lifestyle, including paying for $153,000 of personal expenses on credit cards, funding a trip to New Orleans on a private jet with his family, settling a lawsuit against him for $250,000, and purchasing several properties with cash, including a $690,000 condominium in Las Vegas.
"Illegal activity involving the investment industry has brought financial ruin to many Americans,” stated Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation. “IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money. We are proud to work with our law enforcement partners by lending our expertise in these complex financial investigations.”
“Today’s sentence sends a strong message to those who would use investment schemes to devastate the financial standing of innocent victims and their families,” said A. Todd McCall, Special Agent-in-Charge of the Memphis Division of the Federal Bureau of Investigation. “It is especially cruel when frauds like these target senior citizens. In today’s challenging economic conditions, the FBI and its law enforcement partners will continue to target those who abuse vulnerable citizens in our community.”
Other evidence at trial showed that Olive made a series of misrepresentations about NFOA during the scheme. For example, in February 2006, just days after NFOA had been incorporated, he sent fabricated financial statements to a financial advisor that falsely represented NFOA had been in operation in 2003 and 2004 and held significant assets. In May 2006 Olive represented to a different financial advisor that the company had $35 million in assets, although the charitable tax returns he filed with the State of Tennessee indicated that from its inception to June 2006, NFOA had received only $2.8 million in revenue.Although Olive held NFOA out to be a “charitable organization,” he donated to charity only approximately $108,000 – less than ½ of 1% of the $23.6 million NFOA received.
Further, throughout the scheme, Olive repeatedly represented that his organization had been recognized by the IRS under Section 501(c)(3) of the Internal Revenue Code, although the evidence at trial demonstrated that this statement was false. Olive continued to make this false representation even after his attorney told him on at least two occasions to stop.
Five states issued cease-and-desist orders during the scheme, based in part on their findings that Olive was misrepresenting NFOA’s 501(c)(3) status, and ordered him to stop selling NFOA’s product in those states. The company was seized and ultimately liquidated by the Tennessee Department of Commerce and Insurance in May 2007.
At sentencing, the District Court found and applied sentencing enhancements based on the large loss amount, Olive’s leadership role, the fact that he misrepresented that he was acting on behalf of a charitable organization, the sophisticated nature of the scheme, and the large number of vulnerable victims. Olive has remained in federal custody since the jury’s verdict on March 7, 2013.
The case was investigated by the FBI and the IRS– Criminal Investigation Division. Assistant United States Attorneys Kathryn B. Ward and Darryl A. Stewart represented the government.
Oldcastle Precast, Inc. to Pay False Claims Act SettlementRead the Press Release
Oldcastle Precast, Inc. (“Oldcastle”), headquartered in Atlanta, Georgia, has agreed to pay the United States $95,000.00 to settle False Claims Act (“FCA”) allegations, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.
The settlement resolves allegations that Oldcastle submitted false claims for payment to the United States for products that did not meet required specifications. These products included concrete catch basins that are typically used in and adjacent to roadway construction.
The United States alleged that Oldcastle submitted these claims after repeatedly certifying that its products were in reasonable compliance and were produced pursuant to applicable procedures. The investigation found, however, that many of the products did not meet specifications as they related to the strength and placement of rebar within the pre-cast products.
Although Oldcastle provided these products for projects primarily administered by the Tennessee Department of Transportation, a substantial portion of the funding for these projects was provided by the United States through the Federal Highway Administration, an agency within the U.S. Department of Transportation (“DOT”).
“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said Acting U.S. Attorney David Rivera. “This enforcement effort extends to all efforts to procure funds from the United States and its agencies by false pretenses. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
The federal investigation examined conduct originally discovered by the Tennessee Department of Transportation. An efficient and thorough investigation allowed a resolution to be achieved without filing a complaint, conserving judicial resources and government funds. The settlement was consummated with the understanding that the U.S. Department of Transportation, Federal Highway Administration, may take additional steps in its discretion and pursuant to the applicable regulations to require Oldcastle to adopt compliance measures to reduce the likelihood of future violations of the FCA and other procurement regulations.
This matter was investigated by the Department of Transportation 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.Former Clarksville Electric Department Consultant Sentenced to Four Years in PrisonRead the Press Release
Tommy Lee Walton, II, 39, of Waxhaw, North Carolina, was sentenced yesterday in U.S. District Court in Nashville for his role in an honest services mail and wire fraud scheme involving his payment of bribes and kickbacks to a former president of the Clarksville Department of Electricity, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Walton was sentenced to 48 months in prison, followed by 24 months of incarceration in a halfway house and 24 months of home confinement. He also was ordered to pay restitution to the Clarksville Department of Electricity in the amount of $95,211.38.
“Corrupt practices by public officials and consultants undermine the confidence that citizens must have in their governmental institutions,” said Acting U.S. Attorney David Rivera. “The costs of corruption are born by taxpayers, ratepayers, honest vendors and honest public employees. The Department of Justice is committed to prosecuting individuals who fraudulently game the system to line their own pockets at the expense of the public and of all those who labor honestly and follow the rules.”
Walton was found guilty by a federal court jury in January 2013 of nine counts of honest services mail fraud and seven counts of honest services wire fraud. According to testimony at trial, in November 2008 Walton was hired as a consultant for the Clarksville, Tennessee Department of Electricity by Rick R. Ingram, Sr., then president of the Clarksville Department of Electricity. From November 2008 through June 2009, Walton and his business entity, IntelliNet Consulting LLC, invoiced and received from the Clarksville Department of Electricity a total of $156,139,39. The payment of each invoice was approved by Ingram.
During that same time, Walton paid $51,500 directly to Ingram or to one of Ingram’s creditors. The payments by Walton to Ingram were not disclosed to members of the Clarksville Electric Power Board or to other employees at the Clarksville Department of Electricity. The United States alleged that these payments by Walton were bribes and kickbacks and that the concealment of these payments from the Clarksville Department of Electricity deprived the Clarksville Department of Electricity and its customers of the honest services of Ingram.
On May 25, 2012, Rick R. Ingram, Sr. entered a plea of guilty to two counts of honest services mail fraud and two counts of honest services wire fraud related to the same scheme for which Walton was convicted and sentenced and related to a separate scheme involving Walton’s father, Tommy L. Walton, Sr. Ingram testified at the Walton trial. A sentencing hearing is scheduled for Ingram on November 1, 2013.
Tommy L. Walton, Sr. entered a plea of guilty to eight counts of honest services mail fraud and to five counts of honest services wire fraud on Monday, January 14, 2013. A sentencing hearing for Tommy L. Walton, Sr. is scheduled for August 26, 2013.
This case was investigated by the Tennessee Valley Authority Office of Inspector General. The case was prosecuted by Assistant United States Attorneys Byron Jones and John Webb.
Sherman-Dixie Concrete Industries, Inc. to Pay $664,000To Settle False Claims Act AllegationsRead the Press Release
Sherman-Dixie Concrete Industries, Inc. has agreed to pay the United States $664,581.23 to settle False Claims Act allegations, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.
The settlement resolves allegations that Sherman-Dixie submitted false claims for payment to the United States for products that did not meet required specifications. These products included concrete end walls and catch basins that are typically used in and adjacent to roadway construction.
The United States alleged that Sherman-Dixie submitted these claims after repeatedly certifying that its products were in reasonable compliance and were produced pursuant to applicable procedures. The investigation found however, that many of the products did not meet specifications as they related to the strength and placement of rebar within the pre-cast products. Although Sherman-Dixie provided these products for projects primarily administered by the Tennessee Department of Transportation, a substantial portion of the funding for these projects was provided by the United States through the Federal Highway Administration, an agency within the U.S. Department of Transportation (“DOT”).
“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said Acting U.S. Attorney David Rivera. “This enforcement effort extends to all attempts to procure funds from the United States and its agencies by false pretenses. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
“The settlement announced today sends a strong message to those that would seek to substitute inferior products in transportation-related projects,” said DOT- OIG Regional Special Agent- in- Charge Marlies Gonzalez. “We will leave no stone unturned to ensure the safety of the nation’s transportation system. DOT- OIG remains committed to working with our law enforcement and prosecutorial colleagues, and other federal and state partners to prevent and detect waste, fraud, and abuse.”
The federal investigation corroborated conduct originally discovered by the Tennessee Department of Transportation. An efficient and thorough investigation allowed a resolution to be achieved without filing a complaint, conserving judicial resources and government funds. In addition to the monetary payment, Sherman-Dixie has entered into a monitoring agreement with the U.S. Department of Transportation, Federal Highway Administration. This monitoring agreement will require Sherman-Dixie to take certain compliance measures to reduce the likelihood of future violations of the False Claims Act and other procurement regulations.
This matter was investigated by the U.S. Department of Transportation, the FBI 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.Gallatin Man Pleads Guilty to Passport FraudRead the Press Release
NASHVILLE, Tenn.- July 22, 2013- Jose Camarena, 37, of Gallatin, Tennessee, pleaded guilty on July 19, 2013, to charges arising from fraudulent attempts to obtain a United States passport, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Camarena pleaded guilty to two counts of making a false statement in an application for a United States passport and two counts of falsely representing that he was a United States citizen. Camarena admitted during the plea hearing that he is not a citizen of the United States and that, in 2008, and again in 2012, he applied for a United States passport while falsely representing that he was a U.S. citizen. Camarena also acknowledged that he submitted both passport applications under a false name and admitted providing false birth certificates and a Social Security card that he had obtained unlawfully in support of these applications.
After accepting Camarena’s plea, U.S. District Judge Aleta A. Trauger scheduled a sentencing hearing for September 27, 2013. Camarena could be sentenced to up to ten years in prison in connection with the false statement counts and to up to three years in prison in connection with the false representation of citizenship counts.
The case was investigated by the United States Department of State - Diplomatic Security Service, with assistance from the Gallatin Police Department and the United States Department of Homeland Security- Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney William F. Abely.Two Defendants in Sommet Case Plead GuiltyRead the Press Release
NASHVILLE, Tenn. July 17, 2013 Marsha Whitfield, 39, and D. Edwin Todd, 68, both of Franklin, Tennessee, pleaded guilty today in U.S. District Court, to charges related to their roles in a multi-million-dollar fraud perpetrated by the Sommet Group, LLC, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. Sommet was a payroll-processing company and former sponsor of the Nashville arena once known as the Sommet Center.
Whitfield entered into a plea agreement, through which she pleaded guilty to one count of wire fraud and one count of conspiracy to commit wire fraud, theft or embezzlement from an employee benefit plan, money laundering, and tax fraud. Todd entered a guilty plea to one count of conspiracy, the sole count of the indictment in which he was charged.
As outlined in Marsha Whitfield’s plea agreement, Todd was a co-owner of Sommet, and Marsha Whitfield was vice president of Sommet’s payroll department. Sommet purported to be a payroll-processing company. For a fee, business clients provided Sommet their gross payroll and Sommet promised to allocate and distribute the funds in the appropriate amounts to state and federal taxing authorities, a health‑insurance plan, 401(k) plans, and client employees’ paychecks.
Marsha Whitfiled admitted in her plea agreement, that instead of distributing those client funds in appropriate amounts at appropriate times, she and Todd diverted those funds to personal use, among other things. As a result, clients’ employees’ 401(k) funds were not fully deposited into their 401(k) accounts, their medical and prescription-drug claims were not fully paid by health insurance, and their taxes were not fully or timely paid to the IRS. Marsha Whitfield also admitted that she gave clients false excuses and misleading explanations when they inquired or complained that Sommet had failed to pay obligations such as payroll, health insurance, 401(k) accounts and other financial obligations.
Whitfield and Todd each face up to 5 years in prison and a $250,000 fine on the conspiracy charge. Whitfield faces up to an additional 20 years in prison and a fine of $250,000 on the count of wire fraud.
The remaining defendant, L. Brian Whitfield, is scheduled for trial on January 21, 2014, in U.S. District Court in Nashville. He is presumed innocent unless and until proven guilty.
The case was investigated by agents with the IRS-Criminal Investigation, the FBI and the Department of Labor-Employee Benefits Security Administration. The United States is represented by Assistant United States Attorney Kathryn Ward.Behavioral Analyst Pleads Guilty to Health Care FraudRead the Press Release
NASHVILLE, Tenn. – July 16, 2013 - Jenny Lynn Hall, formerly known as Jenny Lynn Unterstein, 37, of Smithville, Tenn., pleaded guilty yesterday in U.S. District Court, to health care fraud, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Hall was a licensed and board-certified behavioral analyst with a Ph.D. in applied behavioral analysis and provided services to individuals with mental, behavioral or developmental disabilities. At the plea hearing, Hall admitted to creating false documents and forging signatures in 2009 and 2010 to obtain payment from Medicaid for behavioral analysis services that she never provided.
Hall will be sentenced by U.S. District Court Chief Judge William Haynes on October 7, 2013. She faces a maximum penalty of 10 years in prison and a $250,000 fine, as well as forfeiture of proceeds derived from the fraud.
This investigation was conducted by agents of the Department of Health and Human Services Office of Inspector General and the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William F. Abely.Former Army Assistant Inspector General Charged with Fraud and Theft of U.S. Army Officers IdentitiesRead the Press Release
James Robert Jones, 42, of Woodlawn, Tennessee was indicted by a federal grand jury today in connection with a scheme to obtain fraudulent bank loans using the stolen identities of active duty and deployed U.S. Army officers, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.
The indictment charges Jones with aggravated identity theft, bank fraud, and making a false statement to a financial institution.
“This office continues to place a high priority on identity theft crimes,” said Acting United States Attorney David Rivera. “This defendant abused a position of trust and used his position to specifically target those who serve our country, including certain officers who were deployed overseas when he stole their identities. We will seek to hold him accountable for these crimes and for his unlawful attempts to cover them up.”
The indictment alleges that Jones, who was an Assistant Inspector General with the U.S. Army Office of Inspector General at Fort Campbell, abused his position to obtain personal identifying information, including Social Security numbers and dates of birth, of active duty U.S. Army officers, including officers who were deployed to Afghanistan. The indictment also charges Jones fraudulently obtained the personal identifying information of an enlisted soldier who had been killed in combat in Afghanistan and used the personal identifying information of the U.S. Army officers to apply for loans in the officers’ names and successfully obtained fraudulent loans from two financial institutions.
According to the indictment, when confronted by investigators, Jones attempted to conceal his role in this scheme by falsely accusing a deceased U.S. Army officer of planning the scheme. The indictment further alleges that Jones asked a colleague to delete information on his work computer in an effort to impede the ongoing investigation. In connection with this conduct, Jones is charged with obstructing justice and making false statements to investigators.
“The Secret Service remains committed to fighting this type of financial fraud by pursuing individuals who obtain fraudulent loans using stolen identities, especially when the identities belong to members of our armed services,” said Todd Hudson, Special Agent in Charge of the United States Secret Service - Nashville Field Office. “The indictment announced today illustrates how the combined efforts of the Secret Service and our military law enforcement partners help to protect our financial institutions from fraud.”If convicted, Jones faces up to 30 years in prison for the counts of bank fraud and making a false statement to a bank, as well as an additional two years for each count of aggravated identity theft. Jones also faces up to 20 years in prison for attempting to destroy records and 5 years for making false statements to investigators.
The case was investigated by the United States Secret Service and the U.S. Army Criminal Investigations Command. The United States is represented by Assistant U.S. Attorney William F. Abely.
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
Owner of Security Training Companies Indicted in Fraud SchemeRead the Press Release
Lee Coleman, Jr., 40, of Antioch, Tennessee was indicted by a federal grand jury today, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. The indictment charges Coleman with wire fraud, mail fraud, credit card fraud, and aggravated identity theft arising from his operation and management of International Executive Services LLC, Advancement Solutions LLC, and RLC Enterprises, companies that advertised security-related job training and job placement services.
“This defendant is charged with perpetrating a wide-ranging fraud that harmed thousands of victims,” said Acting U.S. Attorney David Rivera. “The U.S. Attorney’s Office is committed to protecting consumers from such scams and to bring to justice those responsible.”
"The Secret Service has a long history of working to combat financial fraud,” stated United States Secret Service Special Agent in Charge Todd Hudson. “The investigation of criminal conduct like that allegedly committed by the defendant will continue to be top priority of the Secret Service."
According to the indictment, Coleman fraudulently induced customers – many of whom are military veterans – to pay registration fees, application fees, and training fees by falsely representing that applicants would receive training in areas including counter-terrorism, counter-assault, and special operations, that applicants would be paid while in training, and that applicants would be guaranteed employment. Coleman also fraudulently induced payments by falsely representing that applicants had been accepted by fictitious training academies. Rather than using the fees paid by applicants to arrange the promised training classes or job placement, Coleman used a large portion of these funds to pay for personal expenses. The indictment further alleges that, as a result of Coleman’s misrepresentations, between 2006 and 2010, more than 2,500 victims were fraudulently induced into paying a total of at least $1,000,000 in fees. The indictment charges that many applicants paid fees exceeding $3,000 and yet were not provided with any training or employment opportunities.
If convicted, Coleman faces up to 25 years in prison for each count of wire fraud and mail fraud and 20 years in prison for each count of credit card fraud, as well as an additional two year mandatory sentence for aggravated identity theft. If convicted, Coleman also faces possible fines and the forfeiture of property derived from or used in violation the offenses charged.
The case was investigated by the United States Secret Service and the Tennessee Bureau of Investigation. Additional assistance was provided by the United States Postal Inspection Service and Metro-Nashville Police Department. The United States is represented by Assistant U.S. Attorney William F. Abely.
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
Four Charged with Defrauding More Than 17,000 VictimsIn National Health Care Benefits SchemeRead the Press Release
57-Count Indictment Alleges Over $28 Million Fraud
Bart Sidney Posey, Sr., 46, and Angela Slavey Posey, 46, both of Springfield, Tennessee; William M. Worthy, II, 50, of Isle of Palms, South Carolina; and Richard Hall Bachman, 65, of Austin, Texas, were indicted by a federal grand jury in Nashville, Tennessee on June 26, 2013 for their roles in a national health care scheme that defrauded more than 17,000 victims of more than $28 million in health benefit plan premiums, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee. The defendants face a 57- count indictment, which alleges an extensive national health insurance fraud scheme that includes charges of conspiracy, wire and mail fraud, embezzlement from a health care benefit plan, and money laundering.
Bart and Angela Posey were the owners and operators of Smart Data Solutions, LLC and other related entities, operating out of Springfield, Tennessee. Richard Bachman was a business associate of Bart and Angela Posey and Vice-President of Smart Data Solutions. William Worthy promoted himself as an insurance consultant and representative of Beema/Serve America, a foreign insurance entity.
The indictment alleges that Serve America, a “shell” company, was promoted as the underwriter for insurance policies sold to the public, however, the company was not licensed to operate in any state. Smart Data Solutions LLC, operated as the benefits administrator for Serve America and related entities. In 2010, Smart Data and its related entities were seized and liquidated by the State of Tennessee after the Davidson County Chancery Court found that these entities were acting as an unlicensed insurance company and posed a significant hazard to the public.
The indictment alleges that at various times and through various business entities, from January 2008 through July 2010, the defendants conspired and engaged in schemes to defraud persons seeking health care insurance. The defendants purported to provide health care coverage but instead operated in a manner to purposely evade state and federal regulations. They collectively operated as unlicensed, unregulated and fraudulent insurance companies, collected more than $28 million in premiums for health care coverage, and then denied or unjustly rejected legitimate claims submitted by participants.
The indictment also alleges that the defendants embezzled funds from the premiums paid by the participants that were intended to be used to pay eligible health care claims. The majority of the claims were not paid and during the scheme, the defendants diverted more than $5.4 million in premiums for their personal use.
“It is a priority of the U.S. Attorney’s Office to pursue those who demonstrate a willingness to steal from individuals who are at the most vulnerable period of their lives-a time when they need health care coverage,” said Acting U.S. Attorney David Rivera. “The magnitude of this fraud and the vast number of victims left in its wake is astounding. Even though the scheme is extensive and complicated, this indictment should serve as notice that we and our law enforcement partners will dedicate the necessary resources to meticulously dismantle such criminal enterprises and see that justice is properly served.”
“The U.S. Postal Inspection Service, working with our law enforcement partners and the U.S. Attorney's office, will aggressively pursue those who utilize the U.S. Mails to defraud innocent victims and bring them to justice,” said B.K. Morris, Inspector in Charge, Atlanta Division.“Confronting those who commit fraud and use criminal schemes to take advantage of innocent victims is a priority for the FBI, especially when it involves the health care of our community,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The indictment announced today illustrate the combined commitment and effort of the FBI and our law enforcement partners to protect the safety and well-being of the public as well as the health care products they rely upon.”
"Theft of employee benefit assets jeopardizes the health security of workers,” said Isabel Colon, Regional Director of EBSA's Atlanta Regional Office. “This case reaffirms the Labor Department's commitment to protect workers' benefits by identifying criminal activity wherever and whenever it occurs. This investigation was part of the U.S. Department of Labor’s Health Benefits Security Project, which focuses on egregious and corrupt health arrangements and seeks to identify potential criminal violations and to assist the victims of crimes related to employee health benefits.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people's money," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable."
“Today’s indictments demonstrate the OIG’s commitment to investigating health care fraud schemes involving employee benefit plans. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate these types of schemes,” said Richard Walker, the Special Agent-in-Charge of the Atlanta Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
If convicted, the defendants face up to 20 years in prison on the wire and mail fraud counts; 10 years in prison on the health care embezzlement and money laundering counts; and five years in prison on the conspiracy counts; and a $250,000 fine per count. Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
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 - Office of Inspector General, the United States Secret Service, the Internal Revenue Service - Criminal Investigation, and the State of Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and John K. Webb.
An indictment is merely an allegation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty at trial at which, the government would bear the burden of proof beyond a reasonable doubt as to each count of the indictment.
Former DOJ Attorney Sentenced to Ten Years ForAttempt to Entice A Minor to Engage in Criminal Sexual ActivityRead the Press Release
Karl Norman Gellert, 48, of Bellevue, Tennessee was sentenced Friday in U.S. District Court in Nashville to Attempt to Entice a Minor to Engage in Criminal Sexual Activity, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Chief Judge William Joseph Haynes, Jr. sentenced Gellert to 10 years of incarceration, to be followed by 20 years of supervised release during which time he will be required to register as a sex offender and participate in sex offender treatment, among other conditions.
“The U.S. Attorney’s office is committed to protecting our children who are powerless from protecting themselves from sexual predators,” said Acting U.S. Attorney David Rivera. “No one is above the law and no one gets a pass, we will pursue the evidence to wherever it leads.”
According to the plea agreement, in early April of 2012, Gellert communicated online with an undercover agent whom he believed to be an eleven year old girl who had never engaged in sexual activity with anyone. Gellert’s communication involved chess, his family, school, relationships, and sex. During multiple online conversations, he provided instructions on how to engage in sexual activities and transmitted images of himself engaging in such activity, as well as images of adult pornography, and a link to a website for sexual devices. He asked if she would be interested in engaging in sexual activity with him in person and encouraged her to engage in sexual activity in preparation for his visit. After communicating online numerous times with this individual whom he believed to be an eleven year old girl, he began also engaging in online discussions with whom he believed to be the child’s mother, but who was the same undercover agent. He also instructed the person whom he believed to be the child’s mother about what do to prepare this child for his sexual abuse of her. The communication continued through early June of 2012.
Prior to engaging in this illegal activity, Gellert had been an attorney with the Department of Justice in Washington, D.C. through 2009.
This matter was investigated by the Metropolitan Nashville Police Department, the Federal Bureau of Investigation, and the United States Attorney’s Offices for the Middle District of Tennessee and the Eastern District of Virginia. The United States was represented by Assistant U.S. Attorneys S. Carran Daughtrey and Alicia Yass.Alabama Man Sentenced to Life Imprisonment for Drug Conspiracy in TennesseeRead the Press Release
Patrick Dewayne Smith, age 34, of Athens, Alabama was sentenced Friday to life imprisonment without release for his role in a drug trafficking conspiracy announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
At Smith’s sentencing, U.S. District Judge Aleta A. Trauger found that Smith had four previous drug felony convictions. Those convictions, combined with the quantity of drugs involved in the conspiracy, required a mandatory life sentence. Judge Trauger in ordering Smith to forfeit $750,000.00 noted that this conspiracy was one of the largest drug conspiracies in the Giles County, Tennessee areaSmith was convicted after a month-long jury trial, along with co-defendants Travis Gentry and Frank Randolph of Pulaski, Tennessee, of a drug trafficking and money laundering conspiracy operating in Giles County, Tennessee, Nashville, Tennessee, and Athens, Alabama.
Frank Randolph was previously sentenced to 70 months imprisonment and a $750,000 forfeiture judgment. Travis Gentry is set for sentencing on August 26, 2013.
Twenty defendants were federally charged in this investigation. Two of those defendants, who are presumed to be innocent, are still pending trial. The remaining defendants have been convicted.
The investigation was conducted by the Drug Enforcement Administration, the Tennessee Bureau of Investigation, the Giles County Sheriff's Department, the Pulaski Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant U.S. Attorneys Sunny A.M. Koshy and Alex Little represented the United States at trial and sentencing.
Ranking Gang Member Sentenced to 47 1/2 Years in Prison for Planned Armed Home InvasionsRead the Press Release
NASHVILLE, Tenn .- June 21, 2013 - Leonard Baugh a/k/a Hype, age 35, of Nashville, was sentenced to 570 months imprisonment (47 ½ years) yesterday by Senior U.S. District Judge John Nixon, following his conviction on April 2, 2013 for a series of offenses involving planned home invasion robberies which he conspired to commit with fellow Rollin’ 60s Crips street gang members by using contraband cellular telephones while serving a state prison sentence at Riverbend Maximum Security Institution in Nashville .
“This sentence effectively removes this defendant from our communities for the rest of his life. He victimized multiple people in his 1997 home invasion offense, and continued to engage in that same conduct over a dozen years later. Imprisonment in the state prison did not deter him,” stated Acting United States Attorney David Rivera. “This prosecution and lengthy prison sentence demonstrates the resolve of the United States Attorney’s Office to prosecute violent crimes as well as how seriously the federal courts treat such crimes.”
Baugh, as well as Omega Harris a/k/a Nino a/k/a Q were convicted of multiple charges by a federal jury after a five week trial which focused on Baugh’s use of contraband cellular telephones while serving a state prison sentence at Riverbend Maximum Security Institution in Nashville. According to the proof at trial, both defendants held the rank of “OG” (Original Gangster) - the highest rank in the Rollin’ 60s Crips street gang, and committed various crimes with other Rollin’ 60s gang members.
Baugh was convicted of conspiring to commit two armed robberies against people he believed to be drug dealers, and with possession of firearms in furtherance of those conspiracies. He was responsible for the multiple guns possessed by the co-conspirators who were to carry out the planned home-invasion style robberies. Baugh was also convicted of conspiring to distribute cocaine and crack cocaine as part of a scheme to raise bond money for two female gang members who had been arrested on state prescription fraud drug charges. Baugh was serving a Tennessee state prison sentence at the time of the offenses, and the trial proof showed he routinely used a contraband cell phone while in Tennessee’s highest security prison to arrange robberies and drug offenses, which were to be committed by other Rollin’ 60s gang members.Harris was convicted of conspiracy to distribute cocaine which was to be taken as part of one of the planned robberies, as well as conspiring to distribute prescription drugs such as Oxycontin.
The proof at trial included evidence that Harris conspired to obtain Oxycontin and other prescription drugs through the use of forged prescriptions as well as through large scale distribution of Oxycontin in various Nashville public housing projects. That proof included estimated distribution of thousands of highly addictive and dangerous Oxycontin 80 milligram pills per week.
Harris was also convicted of being a felon in possession of a firearm, relating to the possession of a folding Kel-Tech Sub 2000 firearm. The proof at trial included tracing that firearm through the hands of over a dozen gang members and associates, including proof that Harris provided that firearm to other gang members for use in other crimes. Harris was acquitted of conspiring to commit various drug-related robberies and the firearms charges related to those conspiracies.
The case was investigated by the FBI, with assistance from other federal and local agencies. This trial was prosecuted by Assistant U.S. Attorney Sunny A.M. Koshy and Special Assistant U.S. Attorney Mario M. Pinto.Hermitage Man Pleads Guilty ToDistribution of Child PornographyRead the Press Release
William John Patterson, 41, of Hermitage, Tennessee pleaded guilty yesterday in U.S. District Court in Nashville to distribution of child pornography, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
According to the plea agreement and other statements made during the hearing yesterday, on September 9, 2012, police were called to the home of William John Patterson in Hermitage, Tennessee, after receiving a report that Patterson had engaged in domestic violence, had sold and used drugs, and was in possession of child pornography. Responding law enforcement officers from the Metropolitan Nashville Police Department obtained and executed search warrants for Patterson’s home and mobile phone. Analysis of the electronic equipment revealed that Patterson had obtained 7,300 images and approximately 300 videos depicting the sexual exploitation of minor children and many of the files were located in hidden or unexpected places on the computer.
The examination further revealed that Patterson had been receiving such images since October 2009. The collection predominately consisted of very young girls engaged in sexual activity, including toddlers and very young children being raped and tortured by a variety of methods.
Patterson was subsequently indicted by a federal grand jury on November 14, 2012.
Patterson faces a maximum sentence of 20 years in prison. A first offense of distribution of child pornography carries a minimum mandatory sentence of five years in prison. Patterson is scheduled for sentencing before U.S. District Court Judge Kevin H. Sharp, on September 23, 2013, at 3:30 p.m.
This matter was investigated by the Metropolitan Nashville Police Department, the Dickson County Sheriff’s Office, and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney S. Carran Daughtrey.Real Estate Broker Pleads Guilty to Scheme to Defraud ClientsRead the Press Release
Debbie Foust, 60, of Mt. Juliet, Tennessee, a real estate broker and former owner of Century 21 Music City, pleaded guilty yesterday in U.S. District Court, to one count of wire fraud, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. The charge arises from Foust’s scheme to defraud her clients of funds provided as a down payment for a purchase of commercial real estate.“Real estate brokers are entrusted by citizens and investors to maintain client funds for their intended purpose, not to be used improperly for personal gain,” said Acting U.S. Attorney David Rivera. “The U.S. Attorney’s Office will continue to seek out and prosecute professionals who defraud their clients or betray their positions of trust.”
At the plea hearing, Foust admitted obtaining a $200,000 deposit via interstate wires from clients who sought to purchase a parcel of commercial real estate located in Madison, Tennessee. Contrary to her representations to these clients, Foust did not keep these funds in trust for use as a down payment on the commercial parcel but instead, converted the funds to her own use by writing checks totaling $170,000 to other accounts controlled by her. Foust further admitted writing a check to the sellers of the commercial parcel that was returned for insufficient funds, and failing to appear at the closing for the sale of the property, which was never consummated.
After accepting Foust’s plea, U.S. District Judge William J. Haynes, Jr. scheduled a sentencing hearing for September 12, 2013. Foust faces a maximum sentence of 20 years in prison and a maximum fine of up to $250,000.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Dickson County Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
Defendant Was On State Probation for Prior Offense
Dustin S. Sharp, 32, of Dickson, Tennessee pleaded guilty yesterday in U.S. District Court in Nashville to Receipt of Child Pornography, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
According to the plea agreement, Sharp was on probation for a June 2007 conviction in state court for sexual exploitation of a child when he was again discovered to be trading child pornography on the Internet in 2009. Some of the 765 images and 14 videos discovered during the investigation involved the sexual exploitation of very young children and violence.
Receipt of child pornography carries a minimum mandatory sentence of fifteen years in prison when it is a repeat offense. Sharp is scheduled for sentencing before U.S. District Court Chief Judge William Joseph Haynes, Jr. on September 16, 2013, at 3:00 p.m.
This matter was investigated by the Dickson County Sheriff’s Office and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney S. Carran Daughtrey.Hanson Pipe & Precast to Pay $500,000 to Settle False Claims Act AllegationsRead the Press Release
Hanson Pipe & Precast, headquartered in Irving, Texas, has agreed to pay the United States $500,000 to settle False Claims Act (“FCA”) allegations, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.
The settlement resolves allegations that Hanson submitted false claims for payment to the United States for products that did not meet required specifications. These products included concrete end walls and catch basins that are typically used in and adjacent to roadway construction.
The United States alleged that Hanson submitted these claims after repeatedly certifying that its products were in reasonable compliance and were produced pursuant to applicable procedures. The investigation found, however, that many of the products did not meet specifications as they related to the strength and placement of rebar within the pre-cast products. Although Hanson provided these products for projects primarily administered by the Tennessee Department of Transportation, a substantial portion of the funding for these projects was provided by the United States through the Federal Highway Administration, an agency within the U.S. Department of Transportation (“DOT”).“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said Acting U.S. Attorney David Rivera. “This enforcement effort extends to all efforts to procure funds from the United States and its agencies by false pretenses. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
“The settlement announced today is a strong message to those that would seek to substitute inferior products in transportation-related projects that we will leave no stone unturned to ensure the safety of the Nation’s transportation system,” said DOT OIG Regional Special Agent in Charge Marlies Gonzalez. “DOT OIG remains committed to working with our law enforcement and prosecutorial colleagues, and other Federal and state partners to prevent and detect waste, fraud, and abuse.”
The federal investigation examined conduct originally discovered by the Tennessee Department of Transportation. An efficient and thorough investigation allowed a resolution to be achieved without filing a complaint, conserving judicial resources and government funds. The settlement was consummated with the understanding that the U.S. Department of Transportation, Federal Highway Administration, may take additional steps in its discretion and pursuant to the applicable regulations to require Hanson to adopt compliance measures to reduce the likelihood of future violations of the FCA and other procurement regulations.
This matter was investigated by the Department of Transportation 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.Twenty-four Defendants Indicted on Federal Drug ChargesRead the Press Release
Investigation Targeted Illegal Distribution of Prescription Pills
A single count indictment returned by a federal grand jury in Nashville, Tennessee last week was unsealed today, charging 24 defendants with conspiring to possess with intent to distribute and distributing diverted prescription pills, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
The diverted pills contained the controlled substances Oxycodone, Hydromorphone, Oxymorphone, and Buprenorphine. The respective brand names for the pills containing those controlled substances are Roxicodone, Dilaudid, Opana, Oxymorphone, and Subutex.
“Prescription drug abuse and diversion is an epidemic facing our nation,” stated Acting U.S. Attorney David Rivera. “The vast number of people addicted to painkillers and the increasing number of overdose deaths attributable to these illegally obtained drugs is unacceptable. We must continue to combine the resources of our law enforcement agencies and engage our communities to reduce the number of illicit pills available to the public.
“The diversion and abuse of prescription drugs in Tennessee is presently the number one drug threat in the state,” said Michael Stanfill, Assistant Special Agent-in Charge of DEA in Tennessee. “This investigation is an excellent example of federal, state, and local agencies combining resources to attack this issue.”
Local, state and federal law enforcement officers, this morning, began arresting those named in the indictment and were executing nine federal search warrants in connection with the investigation.
Those charged in the indictment are:- Kenneth Edward Stafford, 26, of Lebanon, Tenn;
- Kacee Anne Breeden, 28, of Lebanon, Tenn;
- Rashad Woodside a/k/a “Goma,” 37, of North Miami, Florida
- Nicholas Adam Young a/k/a “Nick,” 26, of Lebanon, Tenn;
- Michael Jordan a/k/a “Billy Bob,” 26, of Watertown, Tenn;
- Ronnie Dustin E. McCulloch a/k/a “Dustin,” 24, of Watertown, Tenn;
- Dereck Scott Weatherspoon, 27, of Mt. Juliet, Tenn;
- William Chad Nixon a/k/a “Chad,” 26, of Lebanon, Tenn;
- Michael Chad Corley a/k/a “Chad,” 31, of Lebanon, Tenn;
- Phillip Wayne Allen, 36, of Lebanon, Tenn;
- Fletcher Denning, 22, of Mt. Juliet, Tenn;
- Amanda Meyers, 28, of Lebanon, Tenn;
- Tammy Bristow, 33, of Castalian Springs, Tenn;
- Anthony Lee Collins, Jr. a/k/a “TJ” 27, of Lebanon, Tenn;
- Marcy Jo Pickler, 32, of Lebanon, Tenn;
- Kyle Oakley, 27, of Mt. Juliet, Tenn;
- Amy Nichole Murphy, 34, of Lebanon, Tenn;
- Caitlin Michelle Gibson a/k/a “Katie Bug,” 21, of Lebanon, Tenn;
- James Lester Massey, 43, of Castalian Springs, Tenn;
- Thomas Roberts, 41, of Lebanon, Tenn;
- Robert Anthony Taylor a/k/a “Tony,” 27, of Lebanon, Tenn;
- Sammie Lanette Crutcher, 28, of Lebanon, Tenn;
- Peter Lewis, 31, of Lebanon, Tenn;
- Ryan Moore a/k/a “Rhino,” 23, of Lebanon, Tenn;
The charged offense carries a maximum penalty of 20 years in prison and a fine of up to $1,000,000.
The case was investigated by the Drug Enforcement Administration, the Lebanon Police Department, the Internal Revenue Service-Criminal Investigation, the Tennessee Bureau of Investigation, the Mount Juliet Police Department, the Wilson County Sheriff’s Department, the Franklin Police Department, and the Clarksville Police Department, the Crossville Police Department, with assistance by the U.S. Marshals Service. The United States is represented by Assistant U.S. Attorney Brent A. Hannafan.
An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.Texas Man Enters Plea Agreement for Threatening to Bomb Islamic Center in Murfreesboro, TennesseeRead the Press Release
Javier Alan Correa, 25, of Corpus Christi, Texas pleaded guilty in U.S. District Court in Nashville today to obstructing persons in the free exercise of religious beliefs, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
U.S. District Judge Aleta A. Trauger sentenced Correa to five years probation and ordered that the first eight months be spent in home detention. Correa must also submit to drug testing and substance abuse monitoring, and enroll in an adult education program.
According to the plea agreement, Correa admitted that on September 5, 2011, he called on a cellular phone from Corpus Christi, Texas, to the Islamic Center of Murfreesboro in Murfreesboro, Tennessee, and left a threatening, explicative-ridden voice message saying, amongst other things, “On September 11, 2011, there’s going to be a bomb in the building.“
Correa told the Court that on the night of September 5, 2011, he had been home alone and drinking beer and that while watching a program on CNN entitled “Unwelcome: The Muslims Next Door,” he became enraged and placed the threatening call to the mosque in Murfreesboro.
This case was investigated by the FBI. The government is represented by Assistant United States Attorney Blanche B. Cook and Civil Rights Division Trial Attorney Adriana Vieco.
Two Indicted for Arson and Mail FraudRead the Press Release
Steven Mellides, 51, of Massapequa, New York, and John Fisher, 34, of Mt. Juliet, Tennessee, were
indicted by a federal grand jury on May 15, 2013, and were each charged with four counts relating to their
participation in the intentional burning of a newly constructed single family house in Mt. Juliet, Tenn.,
announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.The indictment was unsealed yesterday after both defendants were arrested. The indictment charges
each defendant with conspiring to commit, and committing, mail fraud and arson.
“This case illustrates the U.S. Attorney’s Office commitment to prosecuting both violent crime and
white collar crime,” said Acting United States Attorney David Rivera. “We will continue working diligently with our local and state partners to bring to justice those who seek to enrich themselves by putting innocent people in harm’s way.”“These arrests indicate the collaborative effort by federal, state and local authorities” said Jeff Fulton,
Special Agent in Charge, ATF, Nashville Field Division. “Arson is a a crime of violence that places innocent
people’s lives and property in harm’s way.”According to the indictment, Mellides owned a residence in Mt. Juliet, Tennessee, and had multiple
conversations with Fisher and at least one other individual regarding intentionally burning the house. Those conversations culminated with Fisher intentionally setting fire to the house on December 12, 2009. After the house was destroyed by fire, Mellides told State Farm Insurance that he did not know how the fire started and did not ask anyone to set the fire, and caused multiple checks to be mailed from State Farm to pay for the damage to the house.If convicted, the defendants each face up to twenty years in prison and a $250,000 fine, as well as
forfeiture of property derived from or used in violation the offenses charged.The case was investigated by agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, the
Bomb and Arson Section of the Tennessee Department of Commerce and Insurance, and the Mt. Juliet Police Department. The United States is represented by Assistant U.S. Attorney Scarlett M. Singleton.An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent
unless and until proven guilty in a court of law.Owners of Murfreesboro Ambulance Service Found Guilty of 42 Counts of Conspiracy, Medicare Fraud, Wire Fraud, and Aggravated Identity TheftRead the Press Release
Woody Medlock, Sr., 69, and his wife, Kathy Medlock, 57, of Murfreesboro, Tennessee, former owners of Murfreesboro Ambulance Service, were convicted by a jury on charges of conspiracy, Medicare fraud, wire fraud, and aggravated identity theft, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. A third defendant, Woody (“Bubba”) Medlock, Jr., was acquitted of similar charges.
According to the evidence presented at trial and the indictment, from approximately 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients who were not qualified to receive ambulance transportation. Evidence at trial showed that the Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims totaling more than $1,600,000, to Medicare and Medicaid for reimbursement of ambulance transports of patients to and from dialysis treatments.
Testimony at trial further showed that these fraudulent claims falsely represented that patients were on stretchers when the patients were actually transported in the front seat of the ambulance or in the captain’s chair/jump seat in the back of the ambulance and were not on stretchers. Fraudulent claims also stated that patients were transported individually when in fact, two patients had been transported simultaneously in one ambulance.
Both defendants were convicted of two counts of aggravated identity theft for using the names and Medicare numbers of patients without lawful authority in submitting claims. Kathy Medlock was also convicted of an additional count of aggravated identity theft for use of a doctor’s name in forging and submitting multiple medical necessity forms as part of a Medicare audit.
“This case represents another example that this office will hold individuals accountable when they steal from health care programs intended to help the elderly and the most needy citizens,” said David Rivera, Acting United States Attorney. “This office, along with our law enforcement partners at the Department of Health and Human Services, the Federal Bureau of Investigation, and the Tennessee Bureau of Investigation, will relentlessly pursue those who choose to defraud the Medicare and Medicaid programs.”
“The Medlocks were running a tax-payer funded taxi service disguised as an ambulance company,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “The flow of Medicare money has been shut off to this husband and wife team.”
"Today's verdict validates the FBI's commitment to investigate those who take advantage of our health care system and defraud the American public," said A. Todd McCall, Special Agent in Charge of the Federal Bureau of Investigation Memphis Division. "We will continue to work tirelessly with our law enforcement partners and the U.S. Attorney's Office to investigate and prosecute those who commit health care fraud."
The Medlocks face up to 20 years in prison, plus an additional mandatory two years, for aggravated identity theft and a $250,000 fine. Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.This case was investigated by the United States Department of Health and Human Services - Office of Inspector General, the FBI and the Tennessee Bureau of Investigation. The United States is represented by Assistant United States Attorney Sandra G. Moses, Special Assistant United States Attorney James S. Seaman, and Assistant United States Attorney Christopher C. Sabis.
Nashville Resident Sentenced for Filingfalse Tax ReturnsRead the Press Release
James Robert Sanford, 53, of Nashville, formerly of Clarksville, Tenn., was sentenced yesterday by Chief U.S. District Judge William J. Haynes, Jr. to serve 13 months in prison followed by a three year term of supervised release, for filing false tax returns, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Sanford was also ordered to pay $78,822.00 in restitution to the United States.
Sanford pleaded guilty to filing false tax returns on January 14, 2013, and admitted that for tax years 2006 and 2007 he had prepared and filed false income tax returns on behalf of himself and his spouse and had assisted 18 other individuals in preparing and filing 26 income tax returns, which fraudulently claimed tax refunds.This case was investigated by the IRS-Criminal Investigation. Assistant U.S. Attorney Darryl A. Stewart represented the government.
Six Indicted for Scheme to Defraud NissanRead the Press Release
Acting United States Attorney David Rivera announced the unsealing of an indictment today charging Kenneth Carter, 44, of Corona, Calif., Francisco DeLaRosa, 40, of West Covina, Calif., Adrian Franklin, 39, of Chandler, Arizona, Bruce Young, 49, of Compton, Calif., Tracey Young, 45, of Los Angeles and Wendell Young, 34, of Inglewood, Calif., with conspiracy, mail fraud, and conspiracy to commit money laundering for their involvement in a scheme to defraud Nissan North America of more than $571,500.
According to the indictment, between March 2007 and April 2008, Kenneth Carter was employed as an “Arbitration Specialist” at the Franklin, Tennessee headquarters of Nissan North America. In that role, he was responsible for negotiating settlement of claims brought on behalf of Nissan owners, alleging that Nissan had violated “Lemon Laws” or the “Federal Warranty Act.”
The indictment alleges that from March 2007 through April 2008, the defendants defrauded Nissan by filing false claims under the “Federal Warranty Act”. To accomplish the scheme, the defendants, and/or others acting on their behalf, would approach individuals who owned Nissan vehicles to obtain information such as the owner’s name, address, and vehicle identification number. Carter then used the information to create and cause to be filed, false and fraudulent claims on behalf of the Nissan owners, requesting compensation in the form of settlement checks. Once the checks were issued by Nissan, the defendants directed the Nissan owners to cash the checks or deposit the checks into their bank accounts. Thereafter, the defendants instructed the Nissan owners to pay them a portion of the funds they received from Nissan, with a portion of those funds kicked back and shared between Carter and the other defendants.
During the term of the scheme, Carter filed approximately 80 false claims, resulting in fraudulent payments by Nissan North America totaling approximately $571,500.If convicted, the defendants face up to 20 years on each mail fraud count, 20 years on the count of conspiracy to commit money laundering, 5 years on the count of conspiracy, and 5 years on the count of obstruction of justice.
The case was investigated by the IRS– Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorney Kathryn B. Ward represents the government.
An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.
Gang Leader Sentenced for Multiple Armed Home InvasionsRead the Press Release
Defendant’s Continuous Violent Actions Draws Over 78-Year Prison Sentence
Corey Lamont Lanier a/k/a Foot, 34, of Nashville, was sentenced yesterday by Chief U.S. District Judge William Haynes to 946 months (78 years and 10 months) in prison, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee and Jeff Fulton, Special Agent in Charge the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Nashville Field Division. Lanier was found guilty in December 2012 by a federal jury for his role in planning and carrying out three armed home invasion robberies.“This defendant carried out violent armed home invasions, targeting drug dealers with impunity,” said Acting U.S. Attorney David Rivera. His crimes endangered others and are the type of crimes that can lead to completely innocent people being killed. This sentence ends the violence.”
Jeff Fulton, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives, said “ATF will remain vigilant in aggressively investigating violent criminals within the City of Nashville who utilize firearms to endanger the safety of our citizens.”
Lanier was convicted on three counts of conspiring to commit robberies affecting interstate commerce, as well as three counts of brandishing a firearm during these crimes.
According to evidence presented at trial, Lanier was an “OG” (Original Gangster) - the highest rank in the 98 Mafia Crips street gang. Lanier organized and participated in three armed home invasions that occurred in Nashville in 2009. Each home invasion targeted a location or individual suspected by Lanier and his co-conspirators to be involved in narcotics trafficking. During each instance, a group of three to four armed assailants burst into a home and held those present at gunpoint while demanding drugs and drug proceeds. During two of these robberies, young children were present when armed assailants kicked down the door, burst into the home, and threatened to kill the residents inside.
On November 17, 2009, Metropolitan Nashville Police Officers, including the SWAT Team, responded to the third home invasion and arrested the assailants, who had conspired with Lanier to commit the robbery. Multiple firearms used in the home invasions were recovered. Lanier was not present at the scene of that home invasion, and was later arrested and charged with these offenses as a result of the local and federal investigation.
After his conviction and while pending sentencing, Lanier had another person create a Facebook page which included the government’s witness list with photographs of some of the victims and witnesses who Lanier described as “rats.”
At sentencing, Chief Judge Haynes found that Lanier used electronic media to “malign, harass, and intimidate government witnesses,” that Lanier’s actions posed a “particularly serious threat to these victims and witnesses” especially in light of Lanier’s status as a significant gang leader, and that Lanier continued pursuing “violent actions to terrorize people even after trial.”
The court also found Lanier to be a career offender, with prior felony convictions which included a prior robbery conviction.Based partly on Lanier’s continuing harassment and intimidation of victims and witnesses, and Chief Judge Haynes’ finding that Lanier committed “particularly egregious violent offenses which affected the victims in a horrifically emotional way,” Chief Judge Haynes denied Lanier’s request for leniency and instead imposed the maximum sentence within the Federal Sentencing Guidelines. The sentence also prohibited Lanier from contacting any of the victims, including through the Internet. Since there is no parole from federal sentences, Lanier will likely serve the rest of his life in federal prison.
The investigation was conducted by the ATF and the Metropolitan Nashville Police Department. Assistant U.S. Attorneys Sunny A.M. Koshy and William F. Abely prosecuted the case.
Former Owner of Spring Hill Construction Companysentenced to 36 Months in PrisonRead the Press Release
Stephen McLaughlin, 46, of Pelham, New Hampshire, former owner of EquipLinq, Co., a Spring Hill construction equipment company, was sentenced on May 13, 2013, by U.S. District Court Judge Todd J. Campbell to serve 36 months in prison, following his conviction on February 8, 2013, of two counts of wire fraud and one count of aggravated identity theft, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
According to testimony presented at trial, on at least four occasions while serving as the president of EquipLinq, McLaughlin forged the signatures of EquipLinq investors and customers on false documents that he used to secure financing for the company’s purchase and/or lease of construction equipment inventory. Through his fraudulent activities, McLaughlin investors and creditors were defrauded of more than $100,000.
“Identity theft in various forms, is one of the fastest growing crimes in the United States and is a part of almost every financial crime,” said Acting U.S. Attorney David Rivera. “The U.S. Attorney’s Office is committed to working diligently with our law enforcement partners to prosecute those who commit fraud using theft and those who prey on the unsuspecting public.”
“This sentence validates the FBI’s commitment to relentlessly pursue those who use identity theft to prey on unsuspecting victims and to defraud lenders,” said Gregory W. Bowden, Acting Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation.
This case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorneys Darryl A. Stewart and Kathryn B. Ward.