Middle District of Tennessee
Press releases recorded for this federal judicial district.
Justice Department Officials to Participate in National Night Out Events Across the CountryRead the Press Release
****** MEDIA ADVISORY ******
WASHINGTON – Tomorrow, Attorney General Merrick B. Garland, Deputy Attorney General Lisa O. Monaco, Associate Attorney General Vanita Gupta, and Justice Department officials will participate in National Night Out (NNO) events across the country as part of a Department-wide effort to bring attention to events that build stronger communities. The Attorney General will attend events in the Philadelphia-area, the Deputy Attorney General will attend events in Nashville, Tennessee, and the Associate Attorney General will attend events in Washington, D.C.
NNO is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live. In most areas of the country, the program culminates annually on the first Tuesday of August.
Established in 1984 from a Bureau of Justice Assistance (BJA) grant, the goal of NNO is to build relationships with and between communities and law enforcement. NNO enhances the relationship between neighbors and law enforcement while bringing back a true sense of community.
Deputy Attorney General Monaco Events in Nashville
The Deputy Attorney General will attend NNO events in Nashville. She will be joined by U.S. Attorney Henry Leventis for the Middle District of Tennessee and Chief of Police John Drake of the Metropolitan Nashville Department Police Department.
Approx. 3:30 p.m. CT / 4:30 p.m. ET
- Edgehill Apartments Resident Association
- 1277 12th Avenue S, Nashville, TN 37203
Approx. 5 p.m. CT / 6 p.m. ET
- East Park Community Center
- 600 Woodland Street, Nashville, TN 37203
OPEN PRESS
For information on National Night Out events in your community, visit www.natw.org.
For more information on the NNO events, reach out to [email protected] and:
- [email protected] for the Attorney General
- [email protected] for the Deputy Attorney General
- [email protected] for the Associate Attorney General
Mount Pleasant Man Sentenced to Federal Prison for Child Exploitation ChargesRead the Press Release
NASHVILLE – A Mount Pleasant, Tennessee, man was sentenced to federal prison today for child exploitation charges, announced U.S. Attorney Henry C. Leventis.
Clinton Shawn Gransden, 44, was sentenced to 40 years in prison for the production, receipt, transportation, and possession of child pornography, followed by supervised release for life.
Over the course of several months in 2019, Gransden repeatedly provided a minor teenage girl with alcohol, methamphetamines, and cocaine. While she was under the influence of those substances, he filmed the victim performing sex acts with him and others, and otherwise controlled and degraded her. Gransden also forced a prepubescent girl to perform oral sex on him.
The sexual abuse videos that Gransden created were posted online, where individuals acquainted with the teenage victim saw them and reported the crime to the authorities. Investigators searched Gransden's electronic devices and discovered the sexual abuse videos as well as evidence that Gransden had sent the videos to others. Investigators also found evidence that Gransden downloaded and possessed child pornography depicting the victims.
A federal grand jury indicted Gransden on nine counts of producing child pornography and one count each of transporting, receiving, and possessing child pornography. On February 2, 2023, Gransden pleaded guilty to all the charges.
The U.S. Department of Homeland Security, Homeland Security Investigations and the Maury County Sherriff’s Office investigated the case, with assistance from the FBI. The case is being prosecuted by Assistant U.S. Attorney S. Carran Daughtrey and Trial Attorneys Austin M. Berry and Adam Braskich of the Criminal Division’s Child Exploitation and Obscenity Section.
The case against Gransden’s co-defendants Angel Morales Depasquale and Michelle E. Klen remain pending and they are presumed innocent until proven guilty in a court of law.
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Doctor Convicted of Unlawfully Distributing OpioidsRead the Press Release
A federal jury in the Middle District of Tennessee convicted a medical doctor today for unlawfully distributing controlled substances.
According to court documents and evidence presented at trial, Bowdoin Smith, 67, of Carthage, Tennessee, unlawfully prescribed controlled substances, including opioids such as oxycodone and morphine. Smith, a doctor of osteopathy, owned and operated a general practice medical clinic in Carthage where he knowingly prescribed opioids outside the usual course of professional practice and without a legitimate medical purpose. In 2012, the Tennessee Department of Health placed Smith’s medical license on probation for three years because he routinely prescribed greater amounts of controlled substances than were medically necessary for his patients. After the probation was lifted, Smith continued to write unlawful prescriptions between 2016 and 2019, regularly ignoring the signs of drug abuse and addiction in his patients.
The jury convicted Smith of three counts of unlawful distribution of controlled substances. He faces a maximum penalty of 20 years in prison on each count. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Henry C. Leventis for the Middle District of Tennessee, Special Agent in Charge J. Todd Scott of the Drug Enforcement Administration (DEA) Louisville Field Division, Special Agent in Charge Tamala Miles of the Department of Health and Human Services Office of the Inspector General (HHS-OIG), and Director David Rausch of the Tennessee Bureau of Investigation (TBI) made the announcement.
The DEA, HHS-OIG, and TBI investigated the case.
Trial Attorneys Leslie Williams Fisher and Kelly Lyons of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Appalachian Regional Prescription Opioid (ARPO) Strike Force. Since its inception in late 2018, ARPO has partnered with federal and state law enforcement agencies and U.S. Attorneys’ Offices throughout Alabama, Kentucky, Ohio, Virginia, Tennessee, and West Virginia to prosecute medical professionals and others involved in the illegal prescription and distribution of opioids. Over the past three years, ARPO has charged over 115 defendants collectively responsible for issuing prescriptions for over 115 million controlled substance pills. To date, more than 84 ARPO defendants have been convicted. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Two Tennessee Law Enforcement Officers Charged with Federal Civil Rights and Obstruction Offenses in Excessive Force CaseRead the Press Release
The Justice Department announced today that a federal grand jury returned a five-count indictment charging two Lawrence County, Tennessee, law enforcement officers with federal civil rights and obstruction offenses stemming from their use of unlawful force during the arrest of a 61-year-old man.
According to count one of the indictment, on Oct. 5, 2020, in Giles County, Tennessee, Sherriff’s Investigator Zach Ferguson and Deputy Eric Caperton, aiding and abetting each other, threw the victim, C.J., to the ground, struck him multiple times in the head without a legitimate law enforcement reason and caused his head to strike the pavement. C.J. suffered bodily injury as a result of the actions of Ferguson and Caperton. Counts two and three of the indictment further allege that Ferguson and Caperton each attempted to cover up their misconduct by filing a use of force report that falsely claimed the arrestee was on his knees when the defendants removed him from his van, and that omitted that the defendants, aiding and abetting each other, threw the arrestee to the pavement and struck him multiple times in the head. Counts four and five of the indictment allege that Ferguson and Caperton each obstructed justice by falsely telling criminal investigators that C.J.’s upper body never touched the ground during the arrest and falsely claiming that C.J.’s injuries were caused by punches that Ferguson delivered while the arrestee was still inside his van.
If convicted, Ferguson and Caperton face a maximum penalty of 10 years in prison for the excessive force charge and a maximum of 20 years in prison for the obstruction charges. Both defendants also face up to three years of supervised release and a fine of up to $250,000. A federal district court judge will determine any sentence after considering U.S. Sentencing Guidelines and other statutory factors.
The FBI Memphis Field Office investigated the case.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Henry C. Leventis for the Middle District of Tennessee, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division and Special Agent in Charge Douglas DePodesta of the FBI Memphis Field Office made the announcement.
Assistant U.S. Attorney Rascoe Dean for the Middle District of Tennessee and Special Litigation Counsel Michael J. Songer of the Civil Rights Division’s Criminal Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Lawrence County Sheriff's Deputies Charged with Civil Rights & Obstruction ViolationsRead the Press Release
NASHVILLE – A federal grand jury returned a five-count indictment yesterday charging two Lawrence County, Tennessee, Sheriff’s deputies with federal civil rights and obstruction offenses stemming from their use of unlawful force during the arrest of a 61-year-old man.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Henry C. Leventis for the Middle District of Tennessee, Assistant Director Luis Quesada of the FBI's Criminal Investigative Division and FBI Special Agent in Charge Douglas DePodesta made the announcement.
According to the indictment, on Oct. 5, 2020, in Giles County, Tennessee, Sherriff’s Investigator Zach Ferguson and Deputy Eric Caperton, threw the victim to the ground, struck him multiple times in the head and caused his head to strike the pavement. As a result of these actions, the victim suffered serious injuries.
The indictment further alleges that the defendants attempted to cover up their misconduct by filing false reports. Finally, the indictment alleges the defendants obstructed justice by falsely telling criminal investigators that the victim’s upper body never touched the ground during the arrest and falsely claiming that the victim’s injuries were caused by punches that Ferguson delivered while the arrestee was still inside his van.
If convicted, the defendants face a maximum sentence of 10 years in prison for the excessive force charge and up to 20 years in prison for the obstruction charges. A federal district court judge would determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Memphis Field Office investigated the case. Assistant U.S. Attorney Rascoe Dean and Special Litigation Counsel Michael J. Songer of the Civil Rights Division’s Criminal Section are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
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Two Men Convicted of Multiple Armed RobberiesRead the Press Release
NASHVILLE – Two men were convicted by a federal jury in Nashville on Friday of multiple crimes for their role in armed robberies committed throughout middle Tennessee, announced United States Attorney Henry C. Leventis.
After a week-long trial, Fredrick Eugene Carney, 32, of Murfreesboro, Tenn., was convicted of robbery, bank robbery, illegally possessing ammunition, and brandishing or discharging a firearm in furtherance of a crime of violence. William John Ewing, III, 26, of Nashville, was found guilty of bank robbery and brandishing a firearm during a crime of violence.
The charges in this case relate to the 2022-armed robberies of two Cash Express businesses in Ardmore, Tenn., and Greenbrier, Tenn., as well as armed robberies of the Regions Bank in Smyrna, Tenn., and the First Horizon Bank on Whites Creek Pike in Nashville. This crime spree occurred between February 18, and May 2, 2022. The jury acquitted both men of the robbery of a Cash Express in Murfreesboro.
“This is yet another example of our commitment to holding violent criminals accountable,” said U.S. Attorney Leventis. “These individuals will now be removed from our communities for a long period of time and will no longer have the opportunity to inflict fear and violence upon others. I commend our law enforcement partners and our trial team for their work in securing these convictions.”
As a result of these convictions, Fredrick Carney faces a mandatory minimum sentence of 31 years, and up to life in federal prison. William Ewing faces a mandatory minimum sentence of seven years, and up to life in prison. Both men will be sentenced by United States District Court Judge William Campbell later this year.
This case was investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Metropolitan Nashville Police Department; the Murfreesboro Police Department; the Ardmore Police Department; the Greenbrier Police Department; the Smyrna Police Department; and the Moulton, Alabama Police Department. Assistant U.S. Attorneys Joseph P. Montminy and Amanda J. Klopf are prosecuting the case.
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Kansas Man Facing Federal Charges for Making Online Threats Toward Nashville Pride EventRead the Press Release
NASHVILLE – A Kansas man has been indicted for making online threats to commit acts of violence at an upcoming Nashville Pride event, announced United States Attorney Henry C. Leventis.
An indictment unsealed this morning charges Joshua Hensley, aka Josh Echo, 25, of Hoisington, Kansas, with two counts of transmitting an interstate threat related to the upcoming Nashville Pride event, scheduled for June 24-25, 2023. Hensley was arrested by FBI agents on Thursday at his home in Kansas and appeared before a U.S. Magistrate Judge. A detention hearing is scheduled for Friday in the District of Kansas.
According to the indictment, on April 26, 2023, Hensley posted comments to a Facebook post for Nashville Pride and threatened to “make shrapnel pressure cooker bombs for this event.” In another comment posted the same day, Hensley threatened to “commit a mass shooting.”
“We will not tolerate hate-based, threats of violence designed to intimidate Tennesseans,” said U.S. Attorney Leventis. “We will continue to work with our partners at the FBI to ensure that the civil rights of all persons are protected.”
If convicted, Hensley faces up to five years in prison and a $250,000 fine on each count.
This case is being investigated by the FBI. Assistant U.S. Attorney Nani M. Gilkerson of the Middle District of Tennessee and Trial Attorney Kyle Boynton of the Justice Department’s Civil Rights Division are prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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21 Plead Guilty to Federal Charges in Maury & Lewis County Drug Distribution ConspiraciesRead the Press Release
NASHVILLE – 21 individuals charged with distributing substantial amounts of controlled substances in and around Maury County and Lewis County, Tennessee, have pleaded guilty to federal drug distribution charges, announced United States Attorney Henry C. Leventis.
An indictment returned in December 2021 charged the following 14 individuals with conspiracy to distribute cocaine, crack cocaine, and methamphetamine, between March 2018 and September 2019:
Julio Esparza, aka Beto, 46; Freddy Quinones, 49; and Jesus Silva, aka Barbas, 41, all of McAllen, Texas; Brandon Dailey, aka Willie Earl, 40; Henry Davis, aka Hank, 43; Vincent Conner, aka Roe, 38; Derrick Nixon, aka Chewy, 55; Shanika Odom, aka Butterball, 32; Terry Strayhorn, aka Goldie Mac, 42; and Samuel Abernathy, 45, all of Mount Pleasant, Tenn.; Brent Burns, aka Smiley, 39; and Tristen Tisby, aka Jolly, 31, both of Columbia, Tenn.; and Tory Hardison, 28; and Carson Lunn, 26, both of Pulaski, Tenn.
In another indictment, the following seven individuals were charged with conspiracy to possess with intent to distribute and to distribute controlled substances, including heroin, methamphetamine, cocaine, crack cocaine, and oxycodone, between October 2017 and November 2020:
Michael Sowell, aka Mac Black, 38; Frank Sparkman, aka Chucky, 42; Antonio Sowell, aka Premo, 38; Tanasha Vaughn, aka Nesha, 24, all of Hohenwald, Tenn.; Charles Lowe-Kelley, aka White Chaz, 31, of Columbia, Tenn.; and Darron Weakley, aka Snype Lucas, 37; and Antonio Laster, aka Lil Memphis, 33, both of Nashville, Tenn. Michael Sowell and Antonio Sowell were also charged with possession of a firearm in furtherance of a drug crime and being a convicted felon in possession of a firearm.
A third indictment charged Keadrick Duke, aka Kebe, 41, of Columbia, Tenn., with distribution of crack cocaine in November 2018.
Every defendant charged across these three indictments has now pleaded guilty, except for Brandon Dailey, who died while awaiting trial.
Many of these defendants face mandatory minimum prison terms of five, ten, or fifteen years, and up to life in prison when they are sentenced later this year.
This case is the result of a multi-agency investigation conducted by the Federal Bureau of Investigation; the Drug Enforcement Administration; the Columbia Police Department; the Hohenwald Police Department; the Spring Hill Police Department; and the Williamson County Sheriff’s Department. Assistant U.S. Attorneys Robert S. Levine and Nani Gilkerson are prosecuting these cases.
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Owner of Mid-State Opioid Treatment Programs Agrees to Settle Allegations of PPP Fraud & Controlled Substance Act ViolationsRead the Press Release
NASHVILLE – James C. Sells III, of Springville, Tennessee, has agreed to pay the United States a total of $500,000 to settle allegations that he fraudulently applied for and received funds from the Paycheck Protection Program (PPP) and violated the Controlled Substances Act, announced United States Attorney Henry C. Leventis.
According to the Settlement Agreement, Sells had ownership in several office-based opioid treatment programs in middle Tennessee, including Nashville Recovery LLC, which he sold in September 2022, Everwell Medical LLC, in Murfreesboro, Forever Well, LLC, in Dickson, and Journey Medical, in Gallatin. The programs, acting through Sells, applied for, and obtained multiple loans from the PPP in the total amount of $143,109, all of which were forgiven.
In addition, in the Settlement Agreement, the United States also alleges that from January 1, 2020, through September 8, 2020, one of the providers who sees patients at two of the programs failed to secure his password to the electronic prescribing system and allowed his office manager to electronically sign prescriptions, in violation of the Controlled Substances Act.
Of the $500,000 settlement, $143,109 is restitution relating to the PPP loans; $143,109 is damages relating to the PPP loan; and the remaining $213,782 is civil penalties for violations of the Controlled Substances Act.
The civil claims settled by this Settlement Agreement are allegations only, and there has been no determination of liability.
This matter was investigated by the Drug Enforcement Administration - Diversion Group and the Tennessee Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Kara F. Sweet of the Middle District of Tennessee.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Methodist Le Bonheur Healthcare Agrees to Settle Allegations That It Violated the Americans with Disabilities ActRead the Press Release
NASHVILLE – Memphis-based Methodist Le Bonheur Healthcare has agreed to resolve allegations that it violated the Americans with Disabilities Act (ADA) by failing to provide effective communication to individuals who are deaf or hard of hearing, announced United States Attorney Henry C. Leventis. As part of the settlement, Methodist will pay $5,000 in penalties to the United States and $18,000 to the complainant.
“We are committed to enforcing the rights of persons with disabilities in Tennessee,” said United States Attorney Henry C. Leventis. “It is vital that individuals who are deaf or hard of hearing can communicate with health care professionals and the Americans with Disabilities Act requires as much.”
The United States alleged that on multiple occasions, Methodist failed to provide the complainant, a deaf individual, with an on-site American Sign Language (ASL) interpreter, and in one incident Methodist used the complainant’s minor child to interpret on her behalf, which the United States contends violates the ADA. The United States also alleged that the use of an interpreter was necessary for effective communication and the lack of a requested interpreter resulted in the complainant either rescheduling medical care for her children or proceeding without the assistance of an interpreter or using other auxiliary aids.
During the investigation, the United States also became aware of additional complaints concerning Methodist’s failure to provide effective communication to several other individuals who are deaf at various Methodist locations. Under the terms of the Settlement Agreement, Methodist has agreed to provide effective communication to its patients and companions on a timely basis and will train its personnel and physicians as to effective communication at multiple hospital locations. Methodist also will designate an ADA liaison who can be contacted 24 hours a day, seven days a week, by patients and/or companions who are deaf or hard of hearing. Significant reporting requirements have also been instituted during the two-year term of the Settlement Agreement, including a requirement to notify the United States of any complaints related to the failure to provide effective communication to deaf or hard of hearing patients and their companions.
The civil claims settled by this Settlement Agreement are allegations only, and there has been no determination of liability.
Assistant U.S. Attorney Kara F. Sweet investigated the complaint and negotiated the Settlement Agreement.
The Department of Justice has a number of publications available to assist entities in complying with the ADA including a Technical Assistance Publication entitled: ADA Requirements: Effective Communication and a Business Brief on Communicating with People Who Are Deaf or Hard of Hearing in Hospital Settings. For more information on the ADA and to access these publications, visit http://www.ada.gov or call the Justice Department’s toll-free ADA information Line at 800-514-0301 or 800-514-0383 (TDD). ADA complaints may be filed by email to [email protected].
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Owners & Operators of Mid-State Restaurants Plead Guilty in Scheme to Harbor Undocumented WorkersRead the Press Release
NASHVILLE – Five persons charged last year in an undocumented worker harboring scheme connected to eight mid-state restaurants, have pleaded guilty, announced Acting U.S. Attorney Thomas J. Jaworski.
In plea hearings concluded this week, Zhongzhi “Tommy” Zhuo, 46, Jianping “Alan” Zhuo, 37, both of Hendersonville, Tenn., and Jianhua “Jason” Zhuo, 35, of Gallatin, Tenn., pleaded guilty to conspiracy to harbor aliens; conspiracy to commit money laundering; and conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS. Zhongzhi Zhuo also pleaded guilty to two counts of harboring aliens, and failure to pay employment taxes. Lili Wu, 32, of Gallatin, pleaded guilty to conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS. Xiaofen “Joyce” Zhuo, 38, of Hendersonville, pleaded guilty in February to conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS.
“These defendants profited by exploiting and concealing the existence of vulnerable people,” said Acting U.S. Attorney Jaworski. “I commend our law enforcement partners for their tireless efforts to bring them to justice and to remove individuals from circumstances in which they were exploited.”
According to records filed with the Court, the defendants participated in a scheme to harbor persons who were in the United States illegally, by providing a means of financial support through employment at the restaurants and providing them with housing and transportation. The scheme also involved paying undocumented workers in cash to avoid paying employment taxes and to conceal the ongoing fraud. The restaurants identified in the indictment include the Fuji Japanese Steakhouse, with locations in Hendersonville, Goodlettsville, and Whitehouse, Tenn.; Bonfire Mongolian Grill, with locations in Hendersonville, Clarksville, Mount Juliet, and Spring Hill, Tenn.; and the Koi Japanese Steakhouse in Gallatin, Tenn. Some of the restaurants are under new ownership.
These guilty pleas follow a nine-count indictment returned by a federal grand jury in July 2022, after which all defendants were arrested by federal agents.
The defendants also agreed to forfeit residences that were used to facilitate violations of these crimes and funds derived from the commission of these crimes. As a result, defendants agreed to forfeit nine bank accounts totaling approximately $412,209.14; U.S. currency totaling $434,400.24; and the properties at 138 Huntington Place, Hendersonville, Tenn.; 1119 Peninsula, Gallatin, Tenn.; 232 Trey Court, Clarksville, Tenn.; and 1050 Bradford Park Road, Mount Juliet, Tenn.
The United States also alleged that this scheme caused a tax loss to the IRS of $1,259,348 and will be seeking restitution.
“These employers exploited a vulnerable population and defrauded the government for their own profit. The guilty pleas are a prime example of the successful outcome when local, state, and federal partners collaborate to protect workers and American businesses,” said Special Agent in Charge Rana Saoud, HSI Nashville. “Through its investigations into exploitative employers, HSI protects the U.S. labor market, workplace conditions, and the dignity of individual workers, who are often taken advantage of through dangerous work conditions, underpayment, and using those noncitizens as a business model to maximize profits.”
“Unscrupulous businesses who willfully skirt their tax and legal workforce obligations must be held to account,” said IRS CI Special Agent in Charge Donald “Trey” Eakins. “Employers who deliberately deflect these obligations undermine what is owed to the U.S. government in payroll taxes and other fees, in addition to creating an unfair economic advantage over law-abiding business owners who play by the rules.”
The defendants face between five and 20 years in prison when they are sentenced later this year. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by Homeland Security Investigations; IRS-Criminal Investigation; the Tennessee Bureau of Investigation; and the Hendersonville Police Department. Assistant U.S. Attorney Robert S. Levine is prosecuting the case.
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Clarksville Man Convicted of Drug Trafficking & Firearms CrimesRead the Press Release
NASHVILLE – A federal jury in Nashville has convicted a Clarksville, Tennessee, man of drug trafficking and firearms offenses, announced United States Attorney Henry C. Leventis.
Mark Ellis, 29, was convicted after a two-day trial of conspiracy to distribute, and possession with intent to distribute, more than 400 grams of fentanyl; being a convicted felon in possession of a firearm; and possession of a firearm in furtherance of a drug trafficking crime.
Ellis and his wife, Yennifer Angeles, 23, were indicted by a federal grand jury in February 2022 after their arrests by Clarksville Police Department (CPD) officers in January 2022.
"We will relentlessly pursue violent drug dealers like this one to hold them accountable for their crimes," said U.S. Attorney Leventis. "I commend the trial team, the Clarksville Police Department and ATF for their work investigating and prosecuting this important case. The citizens of Clarksville are safer because of their efforts."
According to evidence and testimony introduced at trial, CPD officers, using a confidential informant, made a controlled purchase of fentanyl from Ellis while seated in his car at a residence on Mark Spitz Drive in Clarksville. During the transaction, Ellis’ wife exited the car, went into the house, and returned with a baggie of fentanyl which was sold to the informant. A 9mm handgun was visible in the car during the transaction. The resulting investigation and subsequent search of Ellis’ vehicle led to the recovery of a Ruger 9mm pistol and the seizure of almost a pound of fentanyl from the residence, where Ellis lived.
During this investigation, and at the time of his arrest, Ellis was under electronic monitoring and out on bond from an unrelated murder charge in Montgomery County.
While in the Montgomery County Jail, Ellis called his wife and directed her to continue selling fentanyl. That same day, Angeles was stopped by CPD officers in the same vehicle used to make the drug deal the previous day. Further investigation led to the execution of a search warrant on South Lancaster Road in Clarksville, where more than 40 grams of fentanyl was recovered.
“ATF and our law enforcement partners work tirelessly to disrupt the illegal possession of firearms, distribution of narcotics and other acts of violence within our community,” said Marcus Watson, Special Agent in Charge of the ATF Nashville Field Division. “The outcome of this case is the result of extremely great work done by the individuals that took part in this investigation.”
"I would like to commend the detectives and agents with the Clarksville Police Department’s Special Operations Unit, agents with the ATF, and the federal prosecutors who spent countless hours on this investigation,” said Chief David Crockarell. “Their relentless pursuit of justice culminated with the guilty verdict ensures the citizens of Clarksville are much safer today.”
Ellis faces a minimum of 15 years, and up to life in prison when he is sentenced on December 8, 2023. Yennifer Angeles pleaded guilty in March 2023 to conspiracy to distribute fentanyl and faces up to 20 years in prison. She will be sentenced on August 9, 2023.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Clarksville Police Department. Assistant U.S. Attorney Robert E. McGuire is prosecuting the case.
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Three MS-13 Gang Members Convicted of Racketeering and Violent Crime ConspiracyRead the Press Release
A federal jury convicted three La Mara Salvatrucha, or MS-13, members yesterday of RICO conspiracy, murder in aid of racketeering, attempted murder in aid of racketeering, drug trafficking, and destruction of evidence.
According to court documents and evidence presented at trial, from 2014 until 2021, Jorge Flores, 30, aka Peluche, Kevin Tidwell, 29, aka Miklo, both of Nashville, Tennessee; and Jose Pineda-Caceres, 24, aka Demente, a Honduran national, were members of MS-13. MS-13 is a national and transnational gang composed largely of individuals of Salvadoran or Central American descent. Branches or “cliques” of MS-13 operate throughout the United States. MS-13 dedicates its members to preserving and protecting the power, territory, reputation, and profits of the gang through the use of intimidation and violence, including murder and promoting the gang through acts of murder, robbery, drug trafficking, and other criminal activities.
MS-13 members are required to follow various rules, chief among them being that cooperation with law enforcement is strictly prohibited, and it is understood within the gang that anyone who assists police will be punished with death. Members are also required to confront, fight, and/or kill rival gang members and to retaliate quickly and viciously against anyone who disrespects or threatens the gang’s authority, power, reputation, or control of a neighborhood. By committing murders, the defendants gained entrance into MS-13 or earned respect among the other members.
On April 6, 2016, Pineda-Caceres, along with several other MS-13 members and associates, murdered a victim because they believed the victim was a rival gang member. Pineda-Caceres lured the victim to a field where he and other members and associates shot the victim to gain entrance into MS-13. On July 31, 2016, Pineda-Caceres also murdered another victim. After leaving a nightclub in Nashville, Pineda-Caceres followed the victim’s car and, while attempting to kill the victim’s brother, shot and killed the victim. In addition, Tidwell and Flores murdered a victim on May 21, 2017, outside of a bar in Nashville because they believed the victim was associated with a rival gang. Tidwell and Flores shot the victim 11 times while the victim was sitting in the victim’s car. Tidwell and Flores also shot and killed a victim on May 27, 2017, because the victim insulted MS-13. They chased down the victim’s car and shot the victim while the victim attempted to flee. On Sept. 24, 2017, Flores murdered a victim and other MS-13 members and associates lured the victim to a secluded location in Nashville, shot the victim, and placed the victim’s body in the trunk of a car. Flores then burned the car with the victim’s body in the trunk in Cheatham County, Tennessee.
The defendants were convicted of RICO conspiracy, five murders, multiple attempted murders in aid of racketeering, conspiracies to commit murder in aid of racketeering, firearms offenses, tampering with evidence, and drug distribution. They will be sentenced at a later date and each face a mandatory minimum sentence of life in prison.
The three trial defendants were among the nine defendants charged in the indictment. The other six defendants previously pleaded guilty to RICO conspiracy and related offenses, as follows:
- Carlos Ochoa, 33, of Nashville, Tennessee
- Jason Sandoval, 37, of Nashville, Tennessee
- Gerson Serrano-Ramirez, 35, of El Salvador
- Franklin Hernandez, 23, of Honduras
- Juan Melendez, 24, of El Salvador
- Luis Colindres, 26, of Honduras
As part of this multi-year investigation, MS-13 members and associates were also convicted of five additional murders that occurred between 2016 and 2017 in the Nashville area.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Acting U.S. Attorney Thomas J. Jaworski for the Middle District of Tennessee, Special Agent in Charge Marcus Watson of the ATF Nashville Field Division, Special Agent in Charge Rana Saoud of Homeland Security Investigations (HSI) Nashville, Special Agent in Charge J. Todd Scott of the DEA Louisville Field Division, U.S. Marshal for the District of Tennessee Denny King, Metropolitan Nashville Police Chief John Drake, and Director David Rausch of the Tennessee Bureau of Investigation made the announcement.
The ATF, HSI, DEA, U.S. Marshals Service, Metropolitan Nashville Police Department, and Tennessee Bureau of Investigation investigated the case.
Trial Attorney Matthew Hoff of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Ahmed Safeeullah and Brooke Farzad for the Middle District of Tennessee are prosecuting this case.
This prosecution is part of an Organized Crime Drug Enforcement Task Force’s (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Fort Campbell Couple Indicted on Aggravated Child Abuse ChargesRead the Press Release
NASHVILLE – A federal indictment unsealed today, charges a Fort Campbell couple with aggravated child neglect, announced U.S. Attorney Henry C. Leventis.
Andrew J. Garasich, 27, and Lyndsey T. Bustamante, 27, were indicted by a federal grand jury on Monday and were arrested by FBI agents earlier today. Both are scheduled to appear before a U.S. Magistrate Judge this afternoon.
Documents filed with the Court allege that on January 4, 2023, Bustamante took her baby to a Houston County Community Hospital and claimed that several days earlier, the baby was burned while being given a bath by Garasich. Shortly after arriving at the hospital, the baby was life flighted to Vanderbilt Children’s Hospital where it was discovered that the baby also had a skull fracture. While in the Pediatric Intensive Care Unit at Vanderbilt, the baby underwent numerous medical procedures and surgeries and was treated for organ failures and other life-threatening conditions. It is anticipated that the baby will require additional medical treatment and services for years to come.
Charges in this case are being brought under the Assimilative Crimes Act. As there is no federal child abuse statute, charges may be brought under applicable Tennessee statutes for crimes occurring on the Fort Campbell military installation because Fort Campbell is within the territorial jurisdiction of the United States.
If convicted of this Class A felony, both defendants face a mandatory minimum of 15 years in prison.
This case was investigated by the U.S. Army - Criminal Investigation Division and the FBI. Assistant U.S. Attorneys Monica Morrison and Robert E. McGuire are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
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Clarksville Psychiatrist Pleads Guilty to Making False Statements to Medicare & TricareRead the Press Release
NASHVILLE – A Clarksville, Tennessee psychiatrist pleaded guilty today in U.S. District Court to two counts of making false statements relating to health care matters, announced U.S. Attorney Henry C. Leventis.
Dr. James Maures Dodson, 57, pleaded guilty to making false statements to Medicare and TRICARE in connection with two types of criminal activity. First, he caused his practice, Clarksville Behavioral Health (CBH), to submit claims for services he did not provide. On several dates between August 16, 2016, and December 10, 2018, he caused CBH to submit claims for more than 24 hours of services per day.
Second, between May 2018 and October 2020, Dodson caused CBH to falsely represent to TRICARE that other CBH providers were certified by TRICARE when they were not. For TRICARE to pay a claim for the services of a provider, TRICARE regulations required that the provider be certified by TRICARE. In May 2018, CBH offered to repay approximately $135,412.16 to TRICARE due to prior claims that had been rendered by non-TRICARE-certified providers. Notwithstanding this agreement, Dodson caused CBH to continue submitting claims to TRICARE, falsely representing that providers at his practice were TRICARE-certified when they were not.Dodson’s sentencing has been set for September 27, 2023. He faces up to 5 years in prison and a fine of up to $250,000 on each count.
This case was investigated by the Department of Health and Human Services, Office of Inspector General and the Department of Defense, Office of Inspector General. Assistant U.S. Attorney Taylor J. Phillips is prosecuting the case.
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Maury County Corrections Officer Convicted of Obstruction of JusticeRead the Press Release
NASHVILLE – A Maury County, Tennessee corrections officer was convicted today by a federal jury of obstruction of justice, announced U.S. Attorney Henry C. Leventis.
James Justice, aka James Stewart Thomas, 32, of Columbia, Tenn., a corrections officer with the Maury County Sheriff’s Office, was indicted in May 2022 and charged with falsifying records relating to nonconsensual sexual contact that he had with a female inmate in his custody.
“Today’s verdict ensures that James Justice will be held accountable for his actions. As importantly, it ensures that he will no longer be entrusted to serve as a law enforcement officer,” said United States Attorney Henry C. Leventis. “I commend our trial team and partners at the FBI for an excellent job of investigating and presenting this case to the jury.”
Testimony and evidence produced at trial established that Justice wrote an official report in which he falsely claimed that he had reported to two Maury County Jail supervisors that an inmate had made sexual advances toward him while the inmate was in his custody at a hospital. The report also falsely claimed that those two Maury County Jail supervisors both advised him not to write a report about the alleged sexual advances by the inmate, and the report omitted that he had a sexual relationship with the inmate after her release from the custody of the Maury County Jail.
Justice faces up to 20 years in prison when he is sentenced on September 18, 2023. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Amanda Klopf of the Middle District of Tennessee and Trial Attorney Kyle Boynton of the Department’s Civil Rights Division prosecuted the case.
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Former Cumberland County Official Sentenced to Federal Prison for Civil Rights ViolationsRead the Press Release
NASHVILLE – A former county commissioner and director of the Solid Waste Department in Cumberland County, Tennessee, was sentenced today to 17 years in prison followed by five years of supervised release for sexually assaulting seven women who worked under his supervision at the Cumberland County Recycling Center.
Michael Harvel, 61, was previously convicted on nine counts of committing sexual assault. According to evidence introduced at trial – including testimony from 13 women who described Harvel’s sexual abuse – Harvel abused his authority as a county official to sexually assault women who worked under his control at the recycling center. Many of Harvel’s victims were sent to the recycling center to serve court-ordered community service, were required to keep a job as a term of their probation or were otherwise vulnerable because they struggled with substance abuse, were impoverished, or were sole caregivers for their dependents. The jury convicted Harvel of four counts of sexual assault that included kidnapping and three counts that included aggravated sexual abuse.
"Michael Harvel is a predator who used his position of authority to victimize vulnerable women," said U.S. Attorney Henry Leventis. "I am extremely proud of the work our office did, alongside our partners at the Civil Rights Division and FBI, to hold him accountable and to stand up for the rights of the victims."
According to witness testimony at trial, Harvel told one victim to stop by his office at the end of the day, purportedly to discuss a job opportunity, then locked the door to his office and orally raped the woman. He falsely told a second victim that he needed her help with a county work project, then drove her to an isolated landfill in the woods and raped her in a guard shack. The jury also heard evidence that Harvel covered up his pattern of behavior by threatening his victims and other employees so that they would not report his crimes.
“The defendant abused his official position and authority to deprive the victims of their constitutionally-protected right to bodily integrity,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “While this sentence can’t undo the extraordinary pain and suffering the defendant caused these women, it should send a clear message to public officials they are not above the law and will be held accountable when they sexually assault and abuse people subject to their authority.”
“This sentencing should send a clear message that the FBI makes it a priority to bring to justice anyone who violates the civil rights of those they are sworn to protect,” said Special Agent in Charge Douglas S. DePodesta of the FBI Memphis Field Office. “The FBI is committed to protecting the civil rights of all people and will continue to vigorously investigate these kinds of cases alongside our local, state and federal partners.”
The FBI Memphis Field Office investigated the case.
Assistant U.S. Attorney Brooke Schiferle for the Middle District of Tennessee and Special Litigation Counsel Michael J. Songer and Trial Attorney Laura-Kate Bernstein of the Civil Rights Division’s Criminal Section prosecuted the case.
In 2021, in a separate civil action, the Justice Department secured $1.1 million from Cumberland County to resolve a sexual harassment lawsuit. The lawsuit alleged, among other things, that Cumberland County failed to take adequate precautions to prevent Harvel, as the director of the county’s Solid Waste Department, from sexually harassing women he supervised. According to the complaint, Harvel regularly subjected the women to unwanted sexual contact, including kissing and groping, and to unwelcome sexual advances.
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Meharry Medical College Agrees to Settle False Claims Act AllegationsRead the Press Release
NASHVILLE – U.S. Attorney Henry C. Leventis announced today that the United States has reached an agreement with Meharry Medical College to settle allegations of violating the False Claims Act (FCA). Under the terms of the agreement, Meharry will pay $100,749 to resolve the allegations.
The United States alleged that, from 2016 until March 2020, Meharry submitted fraudulent claims to Medicare seeking payment for physician services provided in the internal medicine, OB/GYN, and psychiatric outpatient clinics, and for psychiatric consultations at Nashville General Hospital. In reality, these services were performed by unsupervised, non-physician residents.
“Combating healthcare fraud is a top priority for our office” said United States Attorney Leventis. “The allegations in this case not only constitute fraud on Medicare, but also an unacceptable risk to patients. We appreciate that Meharry agreed to implement changes to its policies to ensure compliance with Medicare’s supervision requirements regarding care provided by residents.”
As a condition of the settlement agreement, Meharry has also agreed to implement a Medicare billing policy designed to ensure compliance with Medicare billing requirements and will provide annual training to its faculty members and in-coming first-year residents concerning Medicare billing requirements for professional services provided by residents.
"To protect the integrity of federal health care programs and the patients they serve, it is important that providers are compliant with supervision requirements and other regulations," said Tamala E. Miles, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. "HHS-OIG remains committed to promoting compliance and preventing fraud, waste, and abuse in HHS programs."
The litigation resolved by this case originally was brought under the qui tam or whistleblower provisions of the FCA by Dr. Rachel Thomas, a former internal medicine and hospitalist physician employed by TeamHealth, which was then under contract to staff the emergency room at Nashville General Hospital. Under the whistleblower provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Middle District of Tennessee and the U.S. Department of Health and Human Services Office of Inspector General. Assistant U.S. Attorney Wynn M. Shuford represented the United States.
The claims in the settlement are allegations only, and there has been no determination of liability.
The case is captioned as United States ex rel. Thomas v. Meharry Medical College, Case No. 3:20-cv-00658 (M.D. Tenn.).
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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Man Convicted of Defrauding Elderly Widow of $1.2 MillionRead the Press Release
NASHVILLE – After a week-long trial, a federal jury this week, convicted Karl Hampton, 65, of Chattanooga, Tennessee, of twelve felony counts related to a scheme to defraud an elderly widow of over one million dollars, announced United States Attorney Henry C. Leventis.
Hampton and his wife were indicted in 2021 for conspiracy and money laundering and Hampton was also charged with wire and mail fraud.
At trial, the evidence showed that Hampton met the victim while he was working as an exterminator in her home. Between 2018 and 2020, Hampton tricked the victim into believing that he would care for her personally and financially. He held himself out as the victim’s “personal representative,” her “son” or her “godson,” and pretended that he was acting on her behalf.
In April 2019, Hampton convinced the victim to sign over her Power of Attorney and to name him in her Revocable Living Trust and in her will. He then methodically drained the victim’s bank accounts, took out a $500,000 line of credit in her name using her property as collateral, and amassed huge charges on her credit cards for his own personal expenses.
In total, Hampton defrauded the victim of approximately $1.2 million. He used her money to purchase luxury items and often spent over $1,000 per day on lottery tickets. The defendant’s lavish spending using the victim’s money included purchasing a Lexus GX460, a 4.3-karat diamond ring, and a $170,000 interest in a pest control business.
Sentencing is scheduled for August 11, 2023. The defendant’s wife pleaded guilty to one count of money laundering in February 2023 and will be sentenced on June 16, 2023.
This case was investigated by the FBI. Assistant U.S. Attorneys Kathryn Booth and Brent Hannafan prosecuted the case.
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Air National Guardsman Charged in Murder-For-Hire SchemeRead the Press Release
NASHVILLE – A Hermitage, Tennessee, man is facing federal charges after meeting with an undercover FBI agent to culminate a deal to murder an individual for payment, announced U.S. Attorney Henry C. Leventis.
Josiah Ernesto Garcia, 21, was charged yesterday in a criminal complaint with the use of interstate facilities in the commission of murder-for-hire.
According to the complaint, Garcia needed money to support his family and in mid-February began searching online for contract mercenary jobs and came across the website www.rentahitman.com. Originally created in 2005 to advertise a cyber security startup company, the company failed and over the next decade it received many inquiries about murder-for-hire services. The website’s administrator then converted the website to a parody site that contains false testimonials from those who have purported to use hit man services, and an intake form where people can request services. The website also has an option for someone to apply to work as a hired killer.
Garcia submitted an employment inquiry indicating that he was interested in obtaining employment as a hit man. Garcia followed up on this initial request and submitted other identification documents and a resume, indicating he was an expert marksman and employed in the Air National Guard since July 2021. The resume also indicated that Garcia was nicknamed “Reaper” which was earned from military experience and marksmanship. Garcia continued to follow up with the website administrator indicating that he wanted to go to work as soon as possible.
An FBI undercover agent then began communicating with Garcia who subsequently agreed to kill an individual for $5,000. On Wednesday, Garcia met the undercover agent at a park in Hendersonville, Tennessee, and was provided with a target packet of a fictional individual, which included photographs and other information about the individual to be killed, and a down payment of $2,500. After agreeing to the terms of the murder arrangement, Garcia asked the agent if he needed to provide a photograph of the dead body. Garcia was then arrested by FBI agents, who in a subsequent search of his home, recovered an AR style rifle.
If convicted, Garcia faces up to 10 years in prison.
This case is being investigated by the FBI. Assistant U.S. Attorney Brooke K. Schiferle is prosecuting the case.
The charge is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Clarksville Man Sentenced to Federal Prison for Child Exploitation ChargesRead the Press Release
NASHVILLE – A Clarksville, Tennessee, man was sentenced to federal prison yesterday for child exploitation charges, announced U.S. Attorney Henry C. Leventis.
Kevin Figueroa, 33, was sentenced to 10 years in prison concurrently on each count of attempted coercion and enticement of a minor to engage in unlawful sexual activity and attempted transfer of obscene material to a minor. Figueroa was sentenced to an additional 30 months in prison for destruction or removal of evidence to prevent search or seizure, to run consecutively, and will serve 10 years of supervised release upon his release from prison.
Figueroa was indicted in April 2022, after contacting an undercover FBI agent who was conducting an online covert investigation using a popular mobile dating application. The undercover profile indicated that the persona of the agent was a 15-year-old female living in Clarksville. Figueroa, using the profile “Spike tkro,” continued to message the agent, even after confirming the persona was a 15-year-old female and sent a lewd photo and message before exchanging phone numbers with the agent. In subsequent communications, Figueroa proposed meeting with the agent to engage in sexual activity and arranged a meeting in November 2019, for which Figueroa failed to show.
The following month, Figueroa initiated contact with the agent on a different dating app and continued to communicate with who he believed to be the same 15-year-old female. Another meeting was subsequently arranged for March 17, 2020, at an apartment building in Clarksville for the purpose of engaging in sexual activity. When Figueroa arrived at the meeting location, he was met by FBI agents.
While being interviewed by FBI agents, Figueroa learned that they intended to seize his phone and surreptitiously deleted apps from his phone.
Figueroa was found guilty of the charges after a bench trial before Chief U.S. District Judge Waverly D. Crenshaw, Jr., in September 2022.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Monica R. Morrison and Robert E. McGuire.
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Former Clarksville School Nurse Sentenced to Federal Prison for Child Pornography CrimesRead the Press Release
NASHVILLE – Leon B. Hensley, 42, a former Clarksville, Tennessee, school nurse, was sentenced today in U.S. District Court to 293 months in federal prison on child pornography charges, announced U.S. Attorney Henry C. Leventis.
Hensley, a former nurse at Northeast High School (NEHS) in Clarksville, was charged and arrested in May 2021, following an investigation into allegations that he sent a digital image, via text message, of a nude adult female to a minor female in the Clarksville area. Hensley had been communicating with the minor female via text and asked her to help him with a photo shoot by posing for photos.
The subsequent investigation resulted in a superseding indictment being returned in June 2022 charging Hensley with 25 counts of attempting to produce child pornography and enticing or coercing a minor to engage in sexually explicit conduct for the purpose of producing child pornography. Hensley pleaded guilty to all charges in September 2022, prior to a trial which was scheduled to begin the same day.
The investigation, including a search of Hensley’s phone led to the discovery of nude images which were later identified as minor female students at NEHS. A search of Hensley’s house resulted in the seizure of numerous electronic devices, including a small covert video camera. The devices also contained image files depicting unidentified females in hospital rooms, airports, and tanning beds, plus video files that appeared to be upskirt videos of adult and minor females.
This case was investigated by Homeland Security Investigations; the U.S. Secret Service; the FBI; and the Clarksville Police Department. Assistant U.S. Attorney Monica Morrison prosecuted the case.
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Former Celina Physician Found Guilty of Health Care Fraud, Violations of the Controlled Substances Act, and Obstruction of JusticeRead the Press Release
NASHVILLE – A former Clay County, Tennessee physician was found guilty yesterday of 45 counts of violations relating to the Controlled Substances Act (CSA), health care fraud, and obstruction of justice, announced acting U.S. Attorney Thomas J. Jaworski.
A federal jury began deliberating Friday and returned the verdict yesterday against Gilbert Ross Ghearing 69, of Crossville, Tennessee, following a five-week trial in U.S. District Court. The jury found Ghearing guilty of 21 counts of health care fraud, 22 counts of prescribing controlled substances without legitimate medical purpose outside the usual course of professional practice, and two counts of obstruction of justice. The jury acquitted Ghearing of 18 counts of health care fraud and CSA violations.
“Doctors serve as the gatekeepers to our healthcare system and the system bestows a great deal of trust in physicians to make it work,” said Acting U.S. Attorney Jaworski. “I commend our law enforcement partners and our trial team for their unparalleled dedication and commitment to ensure that justice was served in a long and protracted investigation and prosecution.”
According to the evidence presented at trial, Gilbert Ghearing, owned and operated a medical clinic in Celina, Tenn., located in direct proximity to four pharmacies. He also provided medical services at another location in Fentress County, Tenn. Between 2016 and 2019, Ghearing repeatedly violated the CSA by prescribing Schedule II and Schedule IV drugs, including benzodiazepines and opioids, outside the usual course of professional practice without legitimate medical purposes to people suffering from active substance use disorders, who abused the substances in combination with illicit drugs and alcohol, repeatedly overdosed, and were hospitalized. The majority of Ghearing’s patients had Medicare or TennCare insurance, Tennessee’s Medicaid program. Ghearing caused pharmacies to submit fraudulent claims to these insurance programs for controlled substance prescriptions written by him that were not medically necessary.
After Ghearing was indicted in June 2019, he altered the medical records of the patients identified in the indictment. A superseding indictment in October 2022 charged Ghearing with obstruction of justice based on the alterations.
Ghearing faces a maximum penalty of 20 years in prison on the CSA convictions, 20 years on the obstruction of justice, and 10 years on health care fraud convictions. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the Drug Enforcement Administration; the U.S. Department of Health & Human Services-Office of Inspector General; and the Tennessee Bureau of Investigation. The DOJ Fraud Section Appalachian Regional Prescription Opioid (ARPO) Strike Force provided valuable investigative resource assistance. Assistant U.S. Attorneys Sarah K. Bogni, Juliet Aldridge, and Amanda J. Klopf prosecuted the case.
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Kentucky Man Sentenced to Federal Prison for Attempted Sexual Exploitation of A MinorRead the Press Release
NASHVILLE – A Walton, Kentucky man was sentenced yesterday in U.S. District Court in Nashville to 15 years in federal prison for attempting to coerce and entice a 13-year-old girl to engage in unlawful sexual activity, announced U.S. Attorney Henry C. Leventis.
Thomas Niemeyer, 43, was also ordered to serve 10 years of supervised release at the conclusion of his prison sentence.
Niemeyer was arrested in July 2021 in Covington, Kentucky, after initiating conversations with who he believed to be a 13-year-old female through online dating applications. Niemeyer was actually communicating with an undercover FBI agent who was conducting online proactive child exploitation investigations on apps known to be used by minors and individuals such as Niemeyer, who have a sexual interest in children.
During the conversations, Niemeyer inquired about the 13-year-old’s sexual experiences, discussed engaging in sexual activity with her, requested nude photographs, sent sexually explicit photographs and videos, and mailed the undercover agent a sexual device.
A federal grand jury in Nashville indicted Niemeyer in August 2021 and he pleaded guilty in October 2022.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Monica R. Morrison.
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United States & Tennessee Settle False Claims Act Allegations Against Three Medical ProvidersRead the Press Release
NASHVILLE – Three Tennessee medical providers have agreed to settle allegations of False Claims Acts violations relating to the submission of claims seeking reimbursement for autonomic nervous system testing, announced U.S. Attorney Henry C. Leventis and Tennessee Attorney General Jonathan Skrmetti.
The United States and Tennessee contend that: Premier Internal Medicine of Giles County, PLLC (Premier) violated the False Claims Act and the Tennessee Medicaid False Claims Act (FCA) by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of January 2, 2015, through April 28, 2021. As a result of the settlement, Premier will pay $440,518.84, of which $264,050.17 is restitution.
Christine King-Patterson (King), a medical practitioner at a former medical practice in Waverly, Tennessee, violated the FCA by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of January 2, 2015, through December 31, 2020. King will pay $126,988.65, of which $82,118.36 is restitution.
Monica Masingale, formerly a nurse practitioner in Englewood, Tennessee, violated the FCA by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of February 1, 2015, through October 30, 2019. Masingale will pay $315,000 in restitution under the terms of the settlement.
Of the $882,50749 in settlements, the United States will receive $639,551.41 and Tennessee will receive $242,956.08.
The civil claims resolved by these settlements are allegations. There has been no determination or admission of liability.
These matters were handled by Assistant U.S. Attorney Kara F. Sweet of the Middle District of Tennessee and Senior Assistant Attorney General Tony Hullender of the Tennessee Attorney General’s Office.
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Florida Sex Offender Sentenced to Federal Prison for Attempting to Exploit A 13-Year-Old Minor in TennesseeRead the Press Release
NASHVILLE – A Florida man previously convicted of sex crimes against a child was sentenced yesterday in U.S. District Court in Nashville to 15 years in federal prison for attempted production of child pornography or attempted sexual exploitation of a minor, announced U.S. Attorney Henry C. Leventis.
David Earl Parker, 62, of Bryceville, Florida, was also ordered to serve seven years of supervised release upon the expiration of his prison sentence.
Parker was indicted in December 2021, after contacting an undercover FBI agent online, who was posing as a 13-year-old female living in Clarksville, Tennessee. During subsequent months of texting the purported minor female, Parker sent photos of his genitals and requested that the minor female send nude photos to him. The conversations continued with Parker making sexually explicit comments and eventually planned to travel to Clarksville to have sex with her. On January 23, 2022, the FBI arrested Parker in Bryceville, Florida on the warrant associated with the indictment. Parker pleaded guilty in October.
Parker was previously convicted in Florida in 2015 after being arrested for similar conduct and arriving at an agreed location to have sex with a 14-year-old female.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Monica R. Morrison.
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Nashville Acupuncture Clinic Agrees to Pay $300,000 to Resolve False Claims Act AllegationsRead the Press Release
NASHVILLE – U.S. Attorney Henry C. Leventis announced today that the United States has reached an agreement with Nashville Acupuncture Clinic, PLLC (NAC) to settle allegations of violating the False Claims Act (FCA). Under the terms of the agreement, NAC will pay $300,000 to resolve the allegations.
“Health care fraud is a top priority of this office,” said U.S. Attorney Leventis. “We will continue to aggressively pursue anyone involved in fraud against government programs. Whether it be a corporate entity, a clinic, or an individual provider, those who seek to exploit federal health care programs for financial gain can expect to be the focus of our civil and criminal enforcement efforts.”
The United States contends that the NAC violated the FCA by submitting false claims to the U.S. Department of Veterans Affairs (VA) for non-reimbursable acupuncture for which the claims were not authorized, not allowed as coded, or lacked supporting documentation. The settlement covers conduct from the period of January 1, 2017, through December 31, 2020, during which the VA reimbursed NAC for claims arising from false statements.
These allegations follow an internal audit by the VA - Office of Inspector General and in its published report issued in December 2021. The audit team estimated that improper payments for acupuncture amounted to about $137 million nationwide during FY 2018 and FY 2019.
“The VA OIG is committed to using all available resources, including proactive data reviews of medical provider billing to identify any billing practices that are statistical outliers. Today’s settlement is a result of those efforts,” said Special Agent in Charge Kim Lampkins of the Department of Veterans Affairs Office of Inspector General’s Mid-Atlantic Field Office. “This civil settlement is a testament to the VA OIG’s commitment to safeguarding the integrity of VA’s healthcare programs and preserving taxpayer funds."
The civil claims resolved by settlement are allegations. There has been no determination or admission of liability in this matter.
This case was investigated by the VA-Office of Inspector General. Assistant U.S. Attorney Kara F. Sweet represented the United States.
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United States Attorney's Office Announces Implementation of New Voluntary Self-Disclosure PolicyRead the Press Release
NASHVILLE – United States Attorney Henry C. Leventis announced that the U.S. Attorney’s Office for the Middle District of Tennessee has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy released earlier today. The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate.
“This policy seeks to standardize how VSDs are defined and credited by USAOs nationwide, to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations,” said U. S. Attorney Leventis. The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
The policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from the Attorney General’s Advisory Committee’s White Collar Fraud Subcommittee.
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Hendersonville Man Extradited from Morocco to Face Bank Fraud & Tax ChargesRead the Press Release
NASHVILLE – A Hendersonville, Tennessee man appeared before a U.S. Magistrate Judge in Nashville earlier today, after being extradited from Morocco to face an array of charges including bank fraud, tax fraud, and money laundering, announced U.S. Attorney Henry C. Leventis.
Scotty Thomas Lumley, 55, arrived in the Middle District of Tennessee last night after being extradited from Morocco to face charges in the U.S. In November 2020, Lumley flew to Morocco after becoming aware of a federal investigation. A federal grand jury in Nashville indicted Lumley in February 2022.
Lumley previously pleaded guilty to federal wire fraud and money laundering charges in 2015 and as alleged in the current indictment, he began committing additional federal crimes later that same year by keeping taxes withheld from his employees’ paychecks, rather than paying those funds over to the IRS.
The indictment also alleges that in 2017, the IRS attempted to recover approximately $119,000.00 which Lumley personally owed the government. In an attempt to settle his tax liability for $10,000, Lumley filed an offer-in-compromise falsely stating that the only vehicle he owned was a GMC 3500 with a negative value. In truth, however, he owned a 2012 Ferrari 458 Spider with significant equity.
In 2017 and 2018, Lumley obtained a series of bank loans after providing lenders with falsified documents showing that his personal net worth was more than $30 million. Lumley did not disclose that he had an outstanding tax liability of more than $119,000 and tricked the lenders into providing more than $3 million in loans.
While in Morocco, Lumley allegedly used a fabricated purchase order to defraud a Utah company of more than $500,000. In December 2021 a grand jury in the District of Utah charged him with wire fraud for this conduct and those charges are currently pending.
If convicted, Lumley faces up to 30 years in prison and a fine of up to $1 million.
This case was investigated by the IRS-Criminal Investigation. Assistant U.S. Attorney Taylor J. Phillips is prosecuting the case for the Middle District of Tennessee. The extradition was handled by the Justice Department’s Office of International Affairs with the cooperation of the Moroccan government and assistance from the U.S. Embassy in Morocco.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Man Pleads Guilty to Coercing and Threatening Children into Producing Images of Child Sexual AbuseRead the Press Release
A Tennessee man pleaded guilty today to coercing and threatening multiple minors into creating videos of themselves engaging in sexual activity.
According to court documents, Caleb Jordan, 22, of Mount Juliet, met three minors online through a video gaming platform. Jordan told the minors, who were between 11 and 14 years old, that people were coming to “get them” and threatened to kill or sexually assault their parents unless the minors created videos of themselves engaging in sexual activity. Jordan instructed them to perform and record specific sex acts and used these minors to create nearly 400 sexually explicit videos, some of which depict the minor victims crying or in visible distress. Jordan then attempted to sell the videos over an encrypted internet chatting application. Electronic devices seized from Jordan’s home also contained more than 10,000 images and videos depicting the sexual abuse of children.
Jordan pleaded guilty to sexual exploitation of children. He is scheduled to be sentenced on June 12 and faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Henry C. Leventis for the Middle District of Tennessee, and Special Agent in Charge Rana Saoud of Homeland Security Investigations (HSI) Nashville made the announcement.
HSI Nashville is investigating the case with valuable assistance provided by HSI offices in Phoenix, Arizona, and Fort Myers, Florida.
Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Carrie Daughtrey for the Middle District of Tennessee are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Nashville Woman Sentenced to Federal Prison for Ponzi SchemeRead the Press Release
NASHVILLE – A Nashville woman who bilked investors by claiming that her sports marketing agency represented famous athletes was sentenced yesterday to 70 months in federal prison, announced U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.
Katie Lynn Mancuso, 41, who owned Gray Area Marketing in Nashville, was initially charged in September 2021 with bank fraud and wire fraud after operating a fraudulent scheme in which she received $2.8 million from investors. Beginning in 2017, Mancuso solicited funds from investors and falsely represented that her agency had been awarded contracts to perform marketing services for professional athletes. Mancuso overstated Gray Area’s assets and receivables and promised to repay investor’s funds within 90 days and with a rate of return usually between 15%-25%. Mancuso also provided investors with fake invoices and emails to make her business appear legitimate, including invoices falsely reflecting money owed to Gray Area by vendors such as Nike, Oakley, and Under Armour for services rendered.
Mancuso also forged the signature of an attorney on a fraudulent attorney-client representation and forged the signatures of another individual on a purported contract. Between June 2017 and February 2021, Mancuso solicited funds from at least 26 investors. Although she repaid some investors, using funds from others, the total loss to investors was more than $1.1 million. Mancuso used the investment funds to pay her living expenses and at hotels, bars, and to obtain plastic surgery.
Mancuso pleaded guilty to the charges in October 2021. However, prior to her scheduled sentencing in August 2022, she continued to commit fraud and submitted false documents to the Court in support of her sentencing request. The Court later revoked Mancuso’s pre-trial release status and remanded her to federal custody.
U.S. District Judge William L. Campbell, Jr., also ordered Mancuso to pay $1,011,241.33 in restitution and spend a term of four years of supervised release at the conclusion of her prison term.
This case was investigated by the FBI. Assistant U.S. Attorney Kathryn W. Booth prosecuted the case.
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Former Operations and Marketing Director at Lifeway Credit Union Sentenced to Federal PrisonRead the Press Release
NASHVILLE - The former Operations and Marketing Director of Lifeway Credit Union in Nashville was sentenced today to 27 months in federal prison, announced U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.
Monica Jackson, 43, of Murfreesboro, Tennessee, was charged in October 2021 with embezzling over $242,000 from Lifeway Credit Union. Jackson was part of the management team and oversaw the credit union’s operating activities, including lending decisions and the decision to order cash. She also had access to Lifeway Credit Union’s cash vault.
Between October 2016 and February 2021, Jackson embezzled approximately $242,156 from the credit union using a variety of methods, including by stealing cash out of the vault. Jackson also opened lines of credit in the names of family members and then transferred funds to accounts she controlled.
Jackson also made fraudulent transfers totaling $27,435 to herself from the account of a deceased credit union member. She used her administrative authority to lock access to the accounts she was using to commit the fraud so that other bank employees could not see those accounts.
Jackson was ordered to pay restitution in the amount of $242,156.00 which represents the proceeds of the crime.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Kathryn W. Booth prosecuted the case.
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Registered Sex Offender from West Virginia Indicted on Child Pornography ChargesRead the Press Release
NASHVILLE – A registered sex offender from Morgantown, West Virginia was arraigned in U.S. District Court in Nashville Wednesday, on charges of attempting to produce child pornography and attempting to transfer obscene material to a minor through interstate commerce, announced U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.
Shaun J. Sanders, 44, was indicted in November 2022 by a federal grand jury in Nashville, after using a messaging app to contact whom he believed was a 13-year-old female but was in fact an undercover FBI agent. During the online conversation, which occurred in July 2022, Sanders sent obscene photos and videos, including photos of himself clothed and unclothed, and requested the purported minor female send him obscene photos of her.
Sanders was arrested in West Virginia in December and was recently transported to the Middle District of Tennessee for further proceedings. If convicted, he faces a mandatory minimum sentence of 15 years in prison and an additional 10 years in prison for committing these offenses as a registered sex offender.
This case was investigated by the FBI. Assistant U.S. Attorney Monica Morrison is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Mexican National Pleads Guilty to Tax Fraud ChargesRead the Press Release
NASHVILLE – A Mexican national pleaded guilty last week in U.S. District Court to conspiring to file false claims against the United States in order to defraud the United States and steal more than $1,000 of public money, announced U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.
Claudio Juarez, 41, pleaded guilty on Wednesday and had been a fugitive for six years following his indictment in 2016, before being arrested in June 2022 in Bowling Green, Kentucky.
“The U.S. Attorney’s Office remains committed to working with our law enforcement partners at IRS – Criminal Investigation to identify and prosecute those who exploit the tax system and defraud the United States,” said U.S. Attorney Leventis. “I commend the agents and prosecutors who have remained diligent through several years of this protracted investigation which has brought dozens of offenders to justice.”
Juarez was one of 46 persons ultimately charged for participating in a tax fraud scheme involving tax preparation businesses throughout middle Tennessee, including Soto Income Tax Services. The federal investigation began in April 2015, when 10 federal search warrants were executed at various residences and tax return preparation businesses. As a result of this investigation, agents subsequently determined that part of the tax fraud scheme dated back to 2011 and resulted in nearly $6 million in bogus refunds.
During the investigation, more than $1 million in cash was seized, as well as several late model, luxury automobiles and 11 Nashville-area properties. Many of the individuals charged, including Juarez, were in the United States illegally. Juarez’s role in the scheme was crucial to its success as he cashed fraudulent checks and dealt in fake documents such as W-2’s and other fraudulent identification documents.
"As we approach tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences as evidenced by the 46 defendants charged," said Donald “Trey” Eakins, Special Agent in Charge of the Charlotte Field Office. "Today's plea again emphasizes that the Internal Revenue Service Criminal Investigation and U.S. Attorney’s office will continue their aggressive pursuit of those who would attempt to defraud America's tax system."
Juarez’s sentencing hearing is scheduled for May 15, 2023. He faces up to 5 years in prison and a $250,000 fine.
This case was investigated by the Internal Revenue Service-Criminal Investigation and Homeland Security Investigations, with arrest assistance by the Bowling Green Police Department. Assistant United States Attorney J. Christopher Suedekum is prosecuting the case.
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- Lengthy Prison Sentences for Three Nashville Drug Dealers
Arkansas Cardiologist Agrees to Pay $900,000 to Settle False Claims Act AllegationsRead the Press Release
NASHVILLE – An Arkansas cardiologist has agreed to settle allegations that he violated the False Claims Act by submitting claims for payment to the Medicare Program for the medically unnecessary placement of cardiac stents, announced Henry C. Leventis, U.S. Attorney for the Middle District of Tennessee.
Jeffrey G. Tauth, M.D., 60, of Hot Springs, Arkansas, is a cardiologist who treated patients at Hot Springs National Park Hospital Holdings, LLC d/b/a National Park Medical Center (NPMC) and National Park Cardiology Services, LLC d/b/a Hot Springs Cardiology Associates. The United States alleges that from September 2013 through August 2019, Tauth submitted or caused the submission of claims for payment to the Medicare Program for cardiac stents that Tauth inserted into Medicare patients that were not medically necessary. As part of the settlement, Tauth has agreed to pay $900,000 and will enter into an Integrity Agreement with the U.S. Department of Health & Human Services (HHS).
“Health care fraud is a top priority of this office,” said U.S. Attorney Leventis. “We will aggressively pursue all those who are involved in fraud against government programs. Whether it be a corporate entity or an individual provider, those who seek to exploit patients and federal health care programs for financial gain can expect to be the focus of our civil and criminal enforcement efforts. As Lifepoint has done here, we encourage those who may become aware of false claims to be proactive in ceasing and disclosing the conduct, particularly when there are allegations of unnecessary medical procedures.”
The settlement follows a November 2019 voluntary disclosure to this Office pursuant to the protocols of the HHS Office of Inspector General, by Brentwood, Tennessee-based Lifepoint Health (Lifepoint), which acquired NPMC and Hot Springs Cardiology Associates in November 2018.
As a result of the voluntary disclosure, the United States entered into a settlement with NPMC and Hot Springs Cardiology in October 2020 for alleged violations of the False Claims Act, wherein the entities agreed to pay $14,669,586, including over $9,000,000 in restitution.
"Submitting claims for medically unnecessary procedures undermines the integrity of federal health care programs and wastes valuable taxpayer dollars," said Tamala E. Miles, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of the Inspector General. "HHS-OIG will continue to work tirelessly alongside our law enforcement partners to protect the integrity of federal healthcare programs and to ensure the appropriate use of U.S. taxpayer dollars."
This case was investigated by the U.S. Department of Health & Human Services – Office of Inspector General. Assistant U.S. Attorney Kara F. Sweet represented the United States.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Former Cumberland County Solid Waste Director Convicted of Civil Rights OffensesRead the Press Release
NASHVILLE – The former Cumberland County, Tennessee Solid Waste Director was convicted yesterday of nine counts of civil rights violations, including kidnapping and sexually assaulting women that he supervised. Michael Harvel, 61, of Crossville, Tennessee, was convicted by a federal jury after an eight-day trial, which included testimony from 13 women who testified about Harvel’s abuse. The jury acquitted Harvel of one misdemeanor count.
Harvel was initially indicted in July 2021 for civil rights violations, and a superseding indictment returned in November 2021 charged him with additional civil rights violations which occurred between 2014 and 2018.
“The defendant raped and assaulted women who were in extremely vulnerable positions,” said U.S. Attorney Mark H. Wildasin. “Those in positions of authority cannot abuse their positions with impunity, and we look forward to seeking a prison sentence for Mr. Harvel that reflects the seriousness of this offense. I commend the victims, investigators, and the prosecution team for holding Mr. Harvel accountable for his crimes and for obtaining justice in this matter.”
Evidence introduced at trial established that Harvel was the Director of Solid Waste for Cumberland County, with an office located in the Cumberland County Recycling Center. Harvel’s official duties included supervising workers at the recycling center and at other satellite locations and county landfills, where he supervised dozens of women who served their court-ordered community service time or worked as paid employees. Many of these were vulnerable women who were recovering drug addicts, convicted felons, and poor, single moms. What each of the victims had in common was that Harvel was their boss, while they were working for a low wage or to work off court fees, in a dirty recycling center.
Harvel was found guilty of four counts that charged him with kidnapping and sexually assaulting women whom he supervised. He was also convicted on three counts that charged him with committing aggravated sexual abuse, including one for forcibly raping a woman in an office at a county facility. Finally, Harvel was found guilty on charges for incidents in which he fondled the breasts and genitals of women against their will.
“The defendant abused his power as a public official in order to sexually assault women under his supervision at a county facility,” said Assistant Attorney General Kristen Clarke for the Civil Rights Division. “This guilty verdict was made possible by the thirteen brave women who testified about the defendant’s abuse, and by the tireless work of the federal investigators and prosecutors who pursued justice in this matter. The Justice Department will continue working hard to protect women from exploitation by government officials who wield authority over them.”
"The FBI Memphis Field Office is proud of the role that it played in bringing this man to justice and will continue to work with our law enforcement partners to remove those whose criminal acts result in targeting individuals in extremely vulnerable positions," said Special Agent in Charge Douglas Korneski of the FBI Memphis Field Office. “The FBI will always work to bring to justice those who violate the civil rights of others.”
Harvel faces a maximum sentence of life in prison. A sentencing date has not yet been set by the court.
This case was investigated by the FBI. Assistant U.S. Attorney Brooke Schiferle of the Middle District of Tennessee and Trial Attorneys Michael J. Songer and Laura-Kate Bernstein of the Justice Department’s Civil Rights Division are prosecuting the case.
In 2021, in a separate civil action, the Department of Justice settled a sexual harassment lawsuit against Cumberland County for $1.1 million. The lawsuit alleged, among other things, that Cumberland County failed to take adequate precautions to prevent Harvel, as the director of the county’s Solid Waste Department, from sexually harassing women he supervised. According to the complaint, Harvel regularly subjected the women to unwanted sexual contact, including kissing and groping, and to unwelcome sexual advances.
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Physician Charged in $9.5 Million Health Care Fraud ConspiracyRead the Press Release
NASHVILLE, Tenn. – A federal indictment unsealed today charges Benjamin T. Toh, M.D., 68, of Chicago, Illinois, for his role in a more than $9.5 million health care fraud conspiracy, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee. Toh was indicted in the Middle District of Tennessee on Monday and arrested by federal agents in Chicago earlier today.
According to the indictment, Toh is a resident of Chicago, Illinois, and a medical doctor, licensed to practice in multiple states, and who operated as a consulting provider to purported telemedicine companies. As an enrolled and participating provider in Medicare, Toh obtained access to Medicare and Medicaid patients through the purported telemedicine companies, and signed orders for cancer genetic testing (“CGx”) in exchange for the payment of kickbacks. Toh signed orders without regard to whether they were medically necessary. Toh was not the treating physician of the patients and he did not conduct an actual telemedicine visit, nor did he follow up with patients on the test results. Toh’s co-conspirators included Advanced Tele-Genetic Counseling (“ATGC”), a telemedicine company based in Kentucky, whose owner, Elizabeth Turner, pleaded guilty last year to a health care fraud conspiracy in the Middle District of Tennessee.
ATGC received kickback payments from marketers in exchange for providing orders signed by doctors, including Toh. The marketers targeted Medicare and Medicaid patients through door-to-door marketing, at senior fairs, at nursing homes, and at other locations, and convinced patients to provide their genetic material via a mouth swab kit. The marketers then provided the swab kits to Crestar Labs, LLC, headquartered in Spring Hill, Tennessee, for CGx testing and in exchange for kickbacks paid by Crestar Labs. Crestar Labs billed Medicare and Medicaid for the tests. The owner of Crestar Labs, Fadel Alshalabi, as well as several marketers, are charged with health care fraud offenses in a separate indictment pending in the Middle District of Tennessee.
Monday’s indictment alleges that during the period of March 2019 through September 2019, Toh and others caused the submission of more than $9.5 million in false and fraudulent claims to Medicare and Medicaid for cancer genetic tests.
If convicted, Toh faces up to 10 years in prison and a $250,000 fine.
This case is being investigated by the U.S. Department of Health & Human Services-Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine are prosecuting the case.
United States v. Elizabeth Turner is docketed at Criminal Case No. 3:21-cr-00280.
United States v. Fadel Alshalabi, et al. is docketed at Criminal Case No. 3:21-cr-00171. The charges are merely accusations. All defendants are presumed innocent until proven guilty in a court of law.
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Last of Gangster Disciples Sentenced in Racketeering & Drug Trafficking ConspiracyRead the Press Release
NASHVILLE – The final six defendants in a RICO conspiracy operating out of Clarksville, Tennessee, were sentenced last week in U.S. District Court, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee. This multi-year investigation resulted in federal charges against 32 gang members and associates, including 12 in this RICO indictment.
For more than a decade, Gangster Disciples members engaged in drug trafficking, intimidated witnesses to prevent them from cooperating with law enforcement, protected the gang’s drug territory, financed the drug trafficking enterprise, and targeted members of rival gangs and others through murders, attempted murders, and other shootings.
Those sentenced this week include Maurice Burks, 36, of Hopkinsville, Kentucky ‒ sentenced to 35 years in prison; Brandon Hardison, 36, of Nashville, Tenn. ‒ sentenced to life plus 20 years in prison; Lamar Warfield, 34, of Guthrie, Kentucky ‒ sentenced to 22 ½ years in prison; Elance Lucas, 33, of Guthrie, Kentucky ‒ sentenced to 19 ½ years in prison; Lawrence Mitchell, 38, of Clarksville, Tenn. ‒ sentenced to 10 years in prison; and James Luke, 36, of Clarksville, Tenn. ‒ sentenced to 8 1/3 years in prison.
As outlined in Court records, members of this gang planned and carried out murders and numerous shootings and assaults in the Clarksville area. These convictions, which were the product of trial verdicts and/or guilty pleas, notably included convictions related to four cold-case homicides in Clarksville: the murder of a Bloods gang member in 2012; the murder of a Gangster Disciples associate, and the related murder of his girlfriend, who was a witness to the murder, in 2012; and the murder of a person who had “disrespected” members of the Gangster Disciples at a party in Guthrie in 2014. Several of these defendants also held local and regional positions of authority in the gang. Their arrest and prosecution resulted in the dismantling of the gang’s leadership structure in middle Tennessee.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Tennessee Bureau of Investigation; the Metropolitan Nashville Police Department; the Montgomery County Sheriff’s Office; the Clarksville Police Department; the Rutherford County Sheriff’s Office; the Murfreesboro Police Department; the Gallatin Police Department; the Kentucky State Police; the 19th Judicial District Drug Task Force; and the Hopkinsville, Kentucky Police Department participated in this decade-long investigation.
Assistant U.S. Attorney Ben Schrader of the Middle District of Tennessee, Assistant U.S. Attorney Shauna Hale of the Middle District of Florida, and Trial Attorneys Ivana Nizich and Gerald A. A. Collins of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
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Felony Lane Gang Participant Sentenced to Federal PrisonRead the Press Release
NASHVILLE – A Florida man was sentenced today in U.S. District Court in Nashville, Tennessee, to 57 months in federal prison for his role in a bank fraud conspiracy, while using methods associated with the tactics of what is commonly known as the Felony Lane Gang (FLG), announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Melvin Brooks, 40, of Fort Lauderdale, was charged in November 2021 with conspiracy to commit bank fraud, bank fraud, and aggravated identity theft. He pleaded guilty to all charges in January.
The FLG typically is a group of thieves from Florida who travel the country and target unoccupied vehicles for “smash and grab” thefts, stealing purses and using stolen identification documents and credit cards to commit financial crimes. When cashing stolen checks, they typically use the drive-thru lane farthest from the bank in an attempt to avoid detection.
According to Court documents, Brooks conspired with Bobbie Lynn Riley, 39, of Dickson, Tenn., to obtain identification documents and checks stolen from others, to fraudulently obtain more than $30,000 in cash and gift cards from area banks and businesses. While travelling interstate, the pair used stolen license plates to mask the identity of rental cars used during the commission of these crimes, also a tactic of the FLG.
Riley was charged in 2019 and was sentenced to 22 months in prison in 2020 after pleading guilty to conspiracy and bank fraud.
This case was investigated by the FBI; the Franklin Police Department; The Brentwood Police Department; and the Williamson County Sheriff’s Department. The 21st Judicial District Attorney General’s Office was instrumental in obtaining the forfeiture of more than $29,000 which was seized from Brooks upon his arrest and will be used as restitution to the victims of his crimes. Assistant U.S. Attorney Taylor J. Phillips is prosecuting the case.
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Tennessee State Senator Pleads Guilty to Campaign Finance SchemeRead the Press Release
Tennessee State Senator Brian Kelsey pleaded guilty today to violating campaign finance laws and conspiring to defraud the Federal Election Commission (FEC) as part of a scheme to benefit his 2016 campaign for U.S. Congress.
According to court documents, Kelsey, 44, of Germantown, admitted that he conspired to, and did, secretly and unlawfully funnel money from multiple sources, including his own Tennessee State Senate campaign committee, to his authorized federal campaign committee. Kelsey, who was a practicing attorney, and his co-conspirators, including Joshua Smith, also caused a national political organization to make illegal and excessive contributions to Kelsey’s federal campaign committee by secretly coordinating with the organization on advertisements supporting Kelsey’s federal candidacy, which caused false reports of contributions and expenditures to be filed with the FEC.
Kelsey and his co-conspirators orchestrated the concealed movement of $91,000 – $66,000 of which came from Kelsey’s State Senate campaign committee, and $25,000 of which came from a nonprofit corporation that publicly advocated on legal justice issues – to a national political organization for the purpose of funding advertisements that urged voters to support Kelsey in the August 2016 primary election. Kelsey and his co-conspirators also caused the political organization to make $80,000 worth of contributions to Kelsey’s federal campaign committee in the form of coordinated expenditures.
Kelsey pleaded guilty to conspiracy to defraud the FEC and aiding and abetting the acceptance of excessive contributions on behalf of a federal campaign. He is scheduled to be sentenced on June 9, 2023, and faces a maximum penalty of five years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Joshua Smith pleaded guilty last month to aiding and abetting the solicitation, receipt, direction, transfer, and spending of soft money in connection with a federal election. He is awaiting sentencing.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee, the U.S. Attorney’s Office for the Western District of Tennessee, and Special Agent in Charge Douglas Korneski of the FBI Memphis Field Office made the announcement.
The FBI is investigating the case.
Trial Attorney John Taddei of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Amanda Klopf for the Middle District of Tennessee, and Assistant U.S. Attorney David Pritchard for the Western District of Tennessee are prosecuting the case.
State Senator Brian Kelsey Pleads Guilty to Campaign Finance ChargesRead the Press Release
NASHVILLE – Tennessee State Senator Brian Kelsey pleaded guilty today to violating campaign finance laws and conspiring to defraud the Federal Election Commission (FEC) as part of a scheme to benefit his 2016 campaign for U.S. Congress.
Kelsey and Joshua Smith, of Nashville, were indicted by a federal grand jury in Nashville in October 2021 and charged with violating multiple campaign finance laws.
According to court documents, Kelsey, 44, of Germantown, admitted that he conspired to and did secretly and unlawfully funnel money from multiple sources, including his own Tennessee State Senate campaign committee, to his authorized federal campaign committee. Kelsey and his co-conspirators, including Joshua Smith, also caused a national political organization to make illegal, excessive contributions to Kelsey’s federal campaign committee by secretly coordinating with the organization on advertisements supporting Kelsey’s federal candidacy and to cause false reports of contributions and expenditures to be filed with the FEC.
Kelsey and the other conspirators orchestrated the concealed movement of $91,000 — $66,000 of which came from Kelsey’s State Senate campaign committee, and $25,000 of which came from a nonprofit corporation that publicly advocated on legal justice issues — to a national political organization for the purpose of funding advertisements that urged voters to support Kelsey in the August 2016 primary election. Kelsey, Smith, and others also caused the political organization to make $80,000 worth of contributions to Kelsey’s federal campaign committee in the form of coordinated expenditures.
Kelsey pleaded guilty to conspiracy to defraud the FEC and aiding and abetting the acceptance of excessive contributions on behalf of a federal campaign. He is scheduled to be sentenced on June 9, 2023 and faces a maximum penalty of five years in prison on each count. Chief U.S. District Court Judge Waverly D. Crenshaw, Jr. will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Joshua Smith pleaded guilty last month to aiding and abetting the solicitation, receipt, direction, transfer, and spending of soft money in connection with a federal election and is awaiting sentencing.
U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee; Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; the U.S. Attorney’s Office for the Western District of Tennessee; and Special Agent in Charge Douglas Korneski of the Federal Bureau of Investigation’s Memphis Field Office made the announcement.
The FBI is investigating the case.
Assistant U.S. Attorneys Amanda Klopf of the Middle District of Tennessee and David Pritchard of the Western District of Tennessee and Trial Attorney John Taddei of the Justice Department’s Public Integrity Section are prosecuting the case.
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Owners of Franklin Gun Shop Plead Guilty to Federal ChargesRead the Press Release
NASHVILLE – The owners of Franklin Gun Shop pleaded guilty today in U.S. District Court to obstruction of justice and making false entries regarding the disposition of firearms, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Alan Hassler, 49, Brian Hassler, 52, and Michael Hassler, 45, all of Franklin, Tennessee, and co- owners of Franklin Gun Shop, a Federal Firearms Licensee (FFL) in Williamson County, Tennessee, were charged in September following a federal regulatory inspection by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
“Proper record keeping is an essential requirement of all Federal Firearms Licensees,” said U.S. Attorney Wildasin. “When the firearms record-keeping process breaks down, the resulting implications can be disastrous and hinder law enforcement’s ability to properly investigate gun crimes or keep firearms out of the hands of violent criminals and disqualified persons. I commend the ATF for their vigorous attention to this matter.”
Court documents reflect that in 2016, the ATF performed a compliance inspection of the Franklin Gun Shop and numerous violations of applicable federal regulations regarding record keeping were found. A follow-up inspection by the ATF in 2020 found that hundreds of firearms, out of the more than 10,000 firearms in Franklin Gun Shop’s inventory, were unaccounted for in the business’s internal records. Over the course of the following year, hundreds of the previously unaccounted-for firearms were located within the business, but as of July 2021, approximately 144 firearms could not be located.
The Hasslers later provided fraudulent documentation to the ATF in an attempt to account for the missing firearms. In many cases, the Hasslers would take a completed, legitimate 4473 form —from a prior purchase — and would add one or more of the missing firearms to the form to make it appear to regulators that these firearms had been purchased as part of that original transaction. The goal was to deceive the ATF into believing that the firearms were not missing but had been sold. Subsequent interviews by the ATF with multiple customers identified on these fraudulent forms established that these customers had not purchased the firearms attributed to them. Several of these customers produced original receipts showing that the missing firearms had not been purchased as the falsified forms indicated.
“ATF’s core mission is to protect the public from violent crime, particularly crimes involving the use of firearms,” said Marcus Watson, Special Agent in Charge of ATF’s Nashville Division. “An essential part of this mission is ensuring that federal firearms licensees comply with applicable federal laws and regulations, particularly the implementing regulations of the Gun Control Act. This FFL committed numerous violations with the intentional disregard of their known legal duty and with plain indifference to their legal obligations. The ATF remains committed to ensuring public safety and compliance and enhancing the traceability of firearms.”
If the plea agreements are accepted by the Court, the Hasslers have agreed to a term of three months of home detention and two years of supervised release. The Hasslers have also surrendered their Federal Firearms License and will complete the audit in progress by the ATF.
Sentencing is scheduled for May 25, 2023.
This case is being investigated by the ATF and prosecuted by Assistant U.S. Attorney Robert E. McGuire.
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Clarksville Home Business Owner Convicted of Filing False Tax ReturnsRead the Press Release
NASHVILLE – A federal jury yesterday convicted a Clarksville, Tennessee man of filing false tax returns that omitted income he earned from his business, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to court documents and evidence presented at trial, David Haley, 65, of Clarksville, owned Haley & Associates Mechanical Contractors, a heating and plumbing business. From 2014 through 2017, Haley & Associates was hired as the subcontractor on commercial projects in middle Tennessee and was paid more than $1,000,000 for each year. Generally, the contractors that hired Haley & Associates paid via check and reported the payments to the IRS via Forms 1099-MISC as non-employee compensation. Even though Haley personally received a portion of the company’s earnings as business income and nonemployee compensation, Haley reported earning no income on his 2014-2017 tax returns. Haley’s failure to report that income on his tax returns for tax years 2015 through 2017 caused the IRS a loss of approximately $186,290.
Haley was convicted of three counts of filing false tax returns for tax years 2015, 2016, and 2017. The jury acquitted Haley of one count of filing a false tax return relating to his 2014 tax filing.
Haley will be sentenced at a later date. He faces a maximum penalty of three years in prison for each count of filing false tax returns. U.S. District Judge William L. Campbell, Jr. will determine any sentence after consideration of the U.S. Sentencing Guidelines and other statutory factors.
IRS-Criminal Investigation investigated the case.
Assistant U.S. Attorney Kathryn W. Booth and Trial Attorney Mitchell T. Galloway of the Justice Department’s Tax Division are prosecuting the case.
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Nashville Trio Facing Federal Human Trafficking & Drug Distribution ChargesRead the Press Release
NASHVILLE – A federal indictment unsealed today charges three Nashville individuals in a sex trafficking and drug distribution conspiracy that operated from a house in Antioch, Tennessee, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Karen (Kay) Bailey, 42, Charles (Chuck) McGlother, 50, and Charles (Ponytail) Sumner, 61, all of Antioch, were indicted Monday and charged with conspiracy to engage in sex trafficking and conspiracy to distribute, and distributing, cocaine, methamphetamine, and fentanyl. The indictment further charges the trio specifically with trafficking three women for sex by force and coercion for the purpose of financial gain. The indictment also charges McGlother with two counts of federal firearms violations, for being a convicted felon in possession of a firearm and for possessing of a firearm in furtherance of a drug trafficking crime.
Documents filed with the Court allege that the trio has operated a human trafficking operation in the Nashville area for over a decade, and dozens of women are believed to have been recruited under false pretenses and coerced and forced into commercial sex acts. Court documents allege that the conspiracy specifically targeted women who were recovering drug addicts with small children who needed housing. The defendants allowed the women and their children to move into their house, got them addicted to drugs, and then coerced them to perform commercial sex acts when they were unable to pay their rent. The defendants further maintained control over the women by not allowing them to ever take their children out of the house without a chaperone.
Court documents also allege that the defendants provided drugs to the trafficked women to keep them addicted, and sold drugs to commercial sex customers and others outside of the sex trafficking conspiracy. McGlother owned several businesses, including a music studio and a food truck, which were used to sell drugs.
On March 31, 2022, a search warrant was executed on Bluewillow Court in Antioch, where the defendants and some of the trafficked women were residing. Several trafficking victims were found on the premises, and some of those victims were living in makeshift sheds without electricity behind the main house.
Sumner was arrested at his home this morning and will appear before a U.S. Magistrate Judge later today. Bailey and McGlother are currently in state custody.
If convicted, the defendants face a mandatory minimum of 15 years and up to life in prison.
This case was investigated by Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms & Explosives; and the Metropolitan Nashville Police Department. Assistant U.S. Attorney Brooke K. Schiferle is prosecuting the case.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty in a court of law.
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Registered Sex Offender Sentenced to 15 Years in Prison for Latest Online ConductRead the Press Release
NASHVILLE – A registered sex offender from Kansas City, Kansas, was sentenced in U.S. District Court in Nashville on Friday to 15 years in prison for attempting to transfer obscene materials to a minor and engaging in this activity as a registered sex offender, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Shawn Glazier, 51, was indicted in July and pleaded guilty in August, after engaging in online communications with an undercover FBI agent who he believed to be 13 years old and living in Clarksville, Tennessee.
Earlier this year, Glazier used an online dating application to initiate a conversation with the undercover agent. Believing that the undercover was a 13-year-old female, Glazier turned the conversation to a sexual nature and began requesting nude and explicit photographs. At one point, Glazier sent the undercover agent a photograph of his penis.
On June 22, 2022, the FBI executed a search warrant at Glazier’s home and arrested him. The subsequent investigation determined that Glazier had been convicted in Missouri in 2006 of attempting to entice a minor to engage in sexual activity and interstate travel to attempt to engage in a sexual act with a minor, which required him to register as a sex offender.
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Monica Morrison.
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Former Owner & CFO of Auto Masters Indicted in Multi-Million Dollar Bank Fraud SchemeRead the Press Release
NASHVILLE – A 21-count indictment, unsealed today, charges the former owner and the former Chief Financial Officer of Auto Masters with conspiracy to commit bank fraud and other charges related to a multi-million-dollar scheme to defraud financial institutions, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Mahan (Mark) Janbakhsh, 47, of Brentwood, Tennessee, and Steven L. Piper, 51, of Joelton, Tennessee, were indicted on Monday and arrested earlier today by FBI agents. Both will appear before a U.S. Magistrate Judge in Nashville later today.
The indictment charges Janbakhsh and Piper with conspiring to defraud Capital One and First Tennessee Bank (now First Horizon); five counts of defrauding these financial institutions; five counts of making false statements and over-valuing property and securities for the purpose of influencing these financial institutions; and three counts of making false representations during official proceedings. Other counts in the indictment charge both defendants with making false statements under oath. Additionally, the indictment charges Janbakhsh with witness tampering and charges Piper with three counts of filing false tax returns.
According to the indictment, Janbakhsh was the majority owner and CEO of America’s United Financial, LLC, and Affiliates, a business that was made up of nine used car dealerships and six related finance companies located in and around Nashville, Tennessee (collectively referred to as Auto Masters). Additionally, Janbakhsh owned other automobile, radio, and real estate related businesses, including Plaza Mariachi, which is an entertainment center and market in South Nashville.
Piper was a Certified Public Accountant and was the Chief Financial Officer of all the Auto Masters entities and prepared the tax returns for Auto Masters and for Janbakhsh personally.
The dealerships sold used cars and provided car loans in connection with those sales. The car loans were then sold to the related Auto Masters finance companies which operated using a line of credit with Capital One and First Tennessee Bank. In order to continue operating with the line of credit, Auto Masters was required to submit monthly borrowing base certificates to report the total value of eligible loans, which formed the collateral for the line of credit.
On October 9, 2017, Piper submitted a borrowing base certificate to Capital One for the period ending September 31, 2017, disclosing that Auto Masters had overstated its collateral by over $33 million. In the certificate, Auto Masters admitted that it had drawn over $26.4 million more than it was permitted to draw under the terms of the line of credit. The following week, Auto Masters filed for bankruptcy. During the bankruptcy proceedings, Capital One sought to depose the loan portfolio and collection manager for Auto Masters, but were unable to do so, as he had left the jurisdiction. The bankruptcy receiver determined that as of July 31, 2017, Auto Masters had overstated its collateral by nearly $37 million, and had drawn over $24 million more than Auto Masters was permitted to draw.
The indictment alleges that Janbakhsh, Piper, and others, manipulated the financial database of Auto Masters and caused false reports to be sent to Capital One to make it appear as though there was more collateral than there actually was. The database manipulation included making false entries to make delinquent loans appear current, and creating false loans based on duplicate Vehicle Identification Numbers, vehicles that had been repossessed, vehicles that had been paid off, and using information from customers who had applied for loans but had been rejected.
The indictment alleges that Janbakhsh and Piper falsely testified during bankruptcy proceedings that they had no knowledge of anyone reporting false information to the lenders and were not involved in the fraudulent scheme.
The indictment also alleges that Janbakhsh engaged in witness tampering with the intent to hinder the federal investigation when he gave the former Auto Masters portfolio manager a cash payment of $10,000 and promised him an additional sum of approximately $300,000 if he would leave the jurisdiction to prevent him from providing information about the fraud to federal agents.
Finally, the indictment alleges that Piper submitted false individual income tax returns for the tax years 2016, 2017, and 2019, in which he underreported his personal income.
The indictment also contains a forfeiture allegation in which the United States seeks to recover all property representing the proceeds derived from the crimes, including a money judgement.
If convicted, Janbakhsh and Piper face up to 30 years in prison and a $1 million fine.
This case was investigated by the FBI and IRS-Criminal Investigation based upon a referral for investigation and prosecution by the U.S. Trustee’s Office. Assistant U.S. Attorneys Kathryn W. Booth and Thomas Jaworski are prosecuting the case. Assistant U.S. Attorney J. Matthew Blackburn is handling the forfeiture.
All defendants are presumed innocent until proven guilty in a court of law.
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U.S. Attorney's Office and FBI to Monitor Election Day ComplaintsRead the Press Release
NASHVILLE – United States Attorney Mark H. Wildasin announced today that Assistant United States Attorneys (AUSAs) Robert Levine and Steve Jordan will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2022, general election. AUSAs Levine and Jordan have been appointed to serve as the District Election Officers (DEOs) for the Middle District of Tennessee, and in that capacity are responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.
United States Attorney Wildasin said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election. Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence. The Department of Justice will always work tirelessly to protect the integrity of the election process.”
The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud. The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.
Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).
In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSAs Levine and Jordan will be on duty in this District while the polls are open. They can be reached by the public at the following telephone number: 615-401-6660.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 615-232-7500.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ .
“Ensuring free and fair elections depends in large part on the assistance of the American electorate,” said U.S. Attorney Wildasin. “It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”
Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
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Nashville Social Club Owner Pleads Guilty to Campaign Finance SchemeRead the Press Release
The former owner and operator of a social club in Nashville pleaded guilty today to violating campaign finance laws to benefit Tennessee State Senator Brian Kelsey’s 2016 campaign for U.S. Congress.
According to court documents, Joshua Smith, 45, of Nashville, Tennessee, secretly and unlawfully funneled $67,000 of what is commonly referred to as “soft money” (funds not subject to the limitations, prohibitions, and reporting requirements of the Federal Election Campaign Act [FECA]) from Kelsey’s Tennessee State Senate campaign committee to a national political organization that funded advertisements urging voters to support Kelsey in the August 2016 primary election.
Smith pleaded guilty to aiding and abetting the solicitation, receipt, direction, transfer, and spending of at least $25,000 in “soft money” in connection with a federal election. He is scheduled to be sentenced on June 9, 2023, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In connection with this scheme, Kelsey was indicted by a federal grand jury in October 2021 and charged with conspiracy to defraud the Federal Election Commission, illegally transferring “soft money” as a federal candidate, illegally transferring “soft money” as a state officeholder, and making and accepting excessive contributions to a federal campaign. The case is scheduled for trial in January 2023.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee made the announcement.
The FBI is investigating the case.
Trial Attorney John Taddei of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Amanda Klopf for the Middle District of Tennessee and David Pritchard for the Western District of Tennessee are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Nashville Social Club Owner Pleads Guilty to Crime Involving Campaign Finance SchemeRead the Press Release
NASHVILLE – A Nashville, Tennessee man pleaded guilty today to violating campaign finance laws to benefit Tennessee State Senator Brian Kelsey’s 2016 campaign for U.S. Congress.
According to court documents, Joshua Smith, 45, secretly and unlawfully funneled $67,000 of what is commonly referred to as “soft money” from Kelsey’s Tennessee State Senate campaign committee to a national political organization that funded advertisements urging voters to support Kelsey in the August 2016 primary election.
Smith pleaded guilty to aiding and abetting the solicitation, receipt, direction, transfer, and spending of soft money in connection with a federal election. He is scheduled to be sentenced on June 9, 2023, and faces a maximum penalty of five years in prison. Chief U.S. District Court Judge Waverly D. Crenshaw, Jr. will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Smith and Kelsey were indicted in October 2021 by a federal grand jury in Nashville. Kelsey is scheduled for trial on January 23, 2023 and is presumed innocent.
U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee and Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division made the announcement.
The FBI is investigating the case. Assistant U.S. Attorneys Amanda Klopf of the Middle District of Tennessee and David Pritchard of the Western District of Tennessee and Trial Attorney John Taddei of the Criminal Division’s Public Integrity Section of the Department of Justice are prosecuting the case.
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